Marketing Management, 45-720, Section A, Group 2
Arnab Basu Malcolm Johnson Douglas Meislahn Nicholas Reid Robert Schmidt
Marketing Management, 45-720, Section A FreeMarkets Online Case
A. Basu, M. Johnson, D. Meislahn, N. Reid, R. Schmidt
Executive Summary FreeMarkets Online is faced with developing a strategy that will increase revenues from $1.8 in 1997 to $6 million in 1998. To accomplish this tripling of their revenue streams, FreeMarkets Online should pursue vertical market dominance by emphasizing its core competencies and shunning any dilution of its product. To this end, the company should focus on the target markets that originally attracted its founders. Also, the unique technology and salable information owned by the company should be guarded, thereby maintaining the value of FreeMarkets Online’s market making abilities.
Problem Statement The central issue faced by senior management at FreeMarkets Online pertains to the future positioning and strategic direction of the company as they enter the new year. In particular, FreeMarkets Online management must decide which strategic opportunities they wish to pursue in order to achieve the revenue goals of $6 million in 1998 over the $1.8 million earned in 1997. These opportunities include both vertical and horizontal market expansion, technology licensing, and networked purchasing information systems. FreeMarkets Online management must ascertain how to best leverage such factors as their current competitive advantages, value proposition, and pricing and technological strategies in order to determine the most profitable and successful strategic direction for the company in the coming year.
Solution Alternatives & Analysis FreeMarkets Online is faced with key strategic decisions vital to the company’s direction. The first is how to deal with their target market. FreeMarkets Online can pursue vertical market dominance in their current target market, or...