Augat Electronics
Augat Electronics Inc.
- A Case Analysis
1. Critical Issues
Canadian market for Cable TV connectors is expected to grow substantially in the coming years. Given the current product quality and the maturity in Value Added Services provided by the Cable TV companies, the basis for purchasing decisions seems to be changing. Given the current market share that Augat has and situation, it will be of at most importance to penetrate one or more of the multiple service operators (MSOs) that dominate the Canadian market. Augat believes that Snap-N-Seal might be the product that would help Augat reach mainstream status
The most significant problems in this case as far as Augat goes is their decision(s) pertaining to
a. Pricing Strategy in Canada – Augat executives has considerable issues on pricing, positioning Snap-N-Seal.
b. Sales and Distribution strategy – decisions regarding what channels to use, partnerships to pursue, penetration strategies to use etc.
If Augat had introduced the product in 1988 when the LRC division first conceived it – they would have been a market leader by now (in 1990). But in early 1989, an innovative new company, Raychem became a surprising market leader in the new connector business that was promised to have very good insulation properties for external connectors. So Raychem benefited from a first-mover advantage. Therefore, it was able to gain clout and its sales and market share soared. By launching Snap-N-Seal in Canada the company needs to overcome several problems. Moreover, those MSOs that are already using the EZF connector must be convinced to switch over to the Snap-N-Seal connector and tools. This would involve a considerable Capital Expenditure for the MSOs, the value proposition for end-users (MSOs) should be substantially high for them to replace the existing Raychem tools/connectors (or any other competitors) for Augat’s Snap-N-Seal connector/tool.
2. Analysis
a. Marketing Mix
Currently for the existing
- A Case Analysis
1. Critical Issues
Canadian market for Cable TV connectors is expected to grow substantially in the coming years. Given the current product quality and the maturity in Value Added Services provided by the Cable TV companies, the basis for purchasing decisions seems to be changing. Given the current market share that Augat has and situation, it will be of at most importance to penetrate one or more of the multiple service operators (MSOs) that dominate the Canadian market. Augat believes that Snap-N-Seal might be the product that would help Augat reach mainstream status
The most significant problems in this case as far as Augat goes is their decision(s) pertaining to
a. Pricing Strategy in Canada – Augat executives has considerable issues on pricing, positioning Snap-N-Seal.
b. Sales and Distribution strategy – decisions regarding what channels to use, partnerships to pursue, penetration strategies to use etc.
If Augat had introduced the product in 1988 when the LRC division first conceived it – they would have been a market leader by now (in 1990). But in early 1989, an innovative new company, Raychem became a surprising market leader in the new connector business that was promised to have very good insulation properties for external connectors. So Raychem benefited from a first-mover advantage. Therefore, it was able to gain clout and its sales and market share soared. By launching Snap-N-Seal in Canada the company needs to overcome several problems. Moreover, those MSOs that are already using the EZF connector must be convinced to switch over to the Snap-N-Seal connector and tools. This would involve a considerable Capital Expenditure for the MSOs, the value proposition for end-users (MSOs) should be substantially high for them to replace the existing Raychem tools/connectors (or any other competitors) for Augat’s Snap-N-Seal connector/tool.
2. Analysis
a. Marketing Mix
Currently for the existing