Paragon Information Systems
Individual Case Analysis Memorandum Paragon Information Systems
BU481 – E Tabatha Dominguez Tuesday, November 29, 2011
PROBLEM AND RECOMMENDATION Paragon Information Systems is a wholly-owned subsidiary of Newtel Enterprises Limited, that operates in Atlantic Canada’s information systems industry. They meet their customers’ needs for information systems hardware and provide them with excellent customer service as well. There was recently a crisis as the founders of Paragon left the company, with the entire sales force, to start a new company in direct competition. Paragon was rebuilt and has become a stronger company since the founders left (EX1). Information systems hardware is a largely undifferentiated product so Paragon needs to deliver something unique and of value to customers. This can be done by adopting a focus differentiation strategy based on offering superior customer service (EX 8-9). Also, they will provide services that complement their hardware. This will allow Paragon to capitalize on their relationship with NewTel Information Systems (NIS) and become more profitable. ANALYSIS Focusing on the customer will create switching costs that will help to better protect Paragon’s position in the market (EX3,5). This will enable them to differentiate their company from competitors with a more sustainable method than simply competing on price. The new strategy will allow Paragon to fully realize the potential of their relationship with NIS (EX6-7). NIS has experience with selling services for information systems that Paragon can use to help their focus on services succeed. Working with an established organization like NIS will give them an opportunity to identify where there are gaps in their strategy and how they can best deal with those deficiencies. The services that accompany the hardware have much better margins than the hardware itself. Including services in the product market focus of Paragon will increase the profitability of the company and
BU481 – E Tabatha Dominguez Tuesday, November 29, 2011
PROBLEM AND RECOMMENDATION Paragon Information Systems is a wholly-owned subsidiary of Newtel Enterprises Limited, that operates in Atlantic Canada’s information systems industry. They meet their customers’ needs for information systems hardware and provide them with excellent customer service as well. There was recently a crisis as the founders of Paragon left the company, with the entire sales force, to start a new company in direct competition. Paragon was rebuilt and has become a stronger company since the founders left (EX1). Information systems hardware is a largely undifferentiated product so Paragon needs to deliver something unique and of value to customers. This can be done by adopting a focus differentiation strategy based on offering superior customer service (EX 8-9). Also, they will provide services that complement their hardware. This will allow Paragon to capitalize on their relationship with NewTel Information Systems (NIS) and become more profitable. ANALYSIS Focusing on the customer will create switching costs that will help to better protect Paragon’s position in the market (EX3,5). This will enable them to differentiate their company from competitors with a more sustainable method than simply competing on price. The new strategy will allow Paragon to fully realize the potential of their relationship with NIS (EX6-7). NIS has experience with selling services for information systems that Paragon can use to help their focus on services succeed. Working with an established organization like NIS will give them an opportunity to identify where there are gaps in their strategy and how they can best deal with those deficiencies. The services that accompany the hardware have much better margins than the hardware itself. Including services in the product market focus of Paragon will increase the profitability of the company and