Organizational Diagnosis in MBA - Assignment Example

 ORGANIZATIONAL DIAGNOSIS MBA integrative project assignment #5 FEED BACK LOOP The feed back loop in the Palm Inc. is quite visible from the facts on ground. This loop is formed between Outputs and Inputs. Inputs variables are the strategy for marketing and production. Outputs are products and services of the Palm Inc. The strategy for marketing of Palm Inc. for selling smart phones in competition with RIM’s blackberry and Apple’s iPhone failed desperately as the market share of these two competitive products increased and the share of Palm smart phones has reduced drastically over the period. CBC news informed about “a new report that stated that almost one of every five Canadians now owns a smart phone.” The survey also found that “RIM's BlackBerry smart phone was the leading choice in Canada, outpacing the Apple iPhone.” (News 7) Market research firm Comscore Canada gave following important figures from the results of the survey of 5,000 people. The Comscore found that the “top smart phone platform in Canada was RIM (42 per cent), followed by Apple (31 per cent) and Android (12.2 per cent).” (Paul Sakuma 7) Country Market Share smart phone users Blackberry Apple iPod Android Canada 32.80% 42.00% 31.00% 12.20% The Comscore also reported in the survey that the market size of smart phone users in USA is 32.2%, France 31.40% and Germany 28.30% compared to Canada’s 32.80% Market Size of Smart phones U.S.A. France Germany 32.20% 31.40% 28.30% The Associated press reported in USATODAY that the “Palm sales figures showed it's having a difficult time getting consumers to pay attention to its phones in a market dominated by iPhones and BlackBerrys. The company shipped 960,000 smart phones to stores and distributors in the quarter that ended Feb. 26, 23% more than in the previous quarter. However, the number of phones that were actually bought by consumers was 408,000, down 29% from the previous quarter. By comparison, Apple sold 8.7 million iPhones in its most recent quarter.”(Svenson 8) The product and services of Palm Inc. were revised last year by introducing a new phone operating system, webOS. It's the basis for a new line of phones, led by the Pre, that have won critical praise but haven't turned the company's fortunes around. The Feedback loop of uncompetitive products and services and failed strategy of marketing and production makes the reinforcing loop of the system. Reinforcing Loop A reinforcing loop is “one in which an action produces a result which influences more of the same action thus resulting in growth or decline. The reinforcing loop is one of the two foundational structures of systems thinking, the other being the Balancing Loop.” (Bellinger 7) The reinforcing loop of Palm Inc. illustrated in figure 1 show that uncompetitive products are returned back with diminishing sale. The major line of products of Palm Inc. is smart phones which has a tough competition with Apple iPhone and RIM’s Blackberry and now Google’s Android. “Some analysts have said the window of opportunity for Palm may be closing, as Android phones continue to gain ground, RIM's BlackBerry retains its hold on the corporate market and Apple's iPhone grows stronger in the consumer market.” (Gonsalves 7) The undesirable result of reinforcing loop of Palm Inc. has turned in to a “viscous cycle”. Figure 1 Causal Factors "Our recent underperformance has been very disappointing, but the potential for Palm remains strong," Palm CEO Jon Rubinstein said in a statement. .”(Svenson 8) Associated Press in its report said that “Palm was a pioneer in the smart phone business, but lagged behind as BlackBerry maker Research in Motion gobbled up the corporate market and Apple's iPhone charmed consumers. More recently, Google's Android software for smart phones has gained traction at Palm's expense.” (Svenson 8) The needs of consumer market and corporate market are two different sets of requirements. Smart phone tried to cater needs of both these sectors and as a result lost customers in both the sectors. When product was launched there were too many hollow claims. No comparison was made or publicity was done about what is exceptional about Palm’s smart phone when compared with iPhone and Blackberry. The initial response was very encouraging but as people started using the products, the difference of quality became evident and gradually the sale started to reduce. All these activities were reflected in the stock price of the Palm Inc. In a discussion on WebOS forum, a consumer sharing his experience about Palm Pre and Apple iPhone 3Gs stated “If you want to start a plan and choose between the Pre and the 3GS, the choice is fairly easy. The3GS. Why?” (Sean 8) He compared the quality of Palm’s Pre and Apple iPhone in his discussion which is tabulated in Table A so that we can understand why the Palm’s smart phones failed in the consumer market. The strategy of Palm for production and marketing smart phone failed resulting in a huge loss for the company. “Palm reported a loss of $22 million, or 13 cents per share, for the quarter, its fiscal third. But that was mitigated by an accounting effect brought about by the recent drop in Palm's stock price. Excluding that effect, the loss was $102.8 million, or 61 cents per share. In the same period a year ago Palm lost $98 million, or 89 cents per share. “(Svenson 8) “This is evident from their stock price which was initially at $1.50 surged to $16.00 when their smart phones were launched and as the consumer response declined their sales has gone down and their stock price came to $7.00” (Duffy 7) Table A: Comparison of features of Palm Pre with Apple iPhone S.No. Features Palm Pre Apple iPhone 1. Cost Same Same 2. Processing Speed Slower Faster 3. Browsing Speed Slower Faster 4. Battery Life Shorter Longer 5. Complaints for Battery Several Never 6. Quality of Music Player Good Better 7. Choice of Apps Less than iPhone Widely supported 8. Camera quality Difficult Better allow manual focus 9. Accessories Limited Wall full of accessories 10. Keyboard Ordinary Touch Screen 11. Multitasking Available Not but can be hacked to do so 12. Screen Smaller Bigger 13. Touch Sensors Visible Can’t see 13 Services None Apple store 14. Screen Protector None Available free 15. Maturity of product Pending as defects rising Full as no physical defects The concluding remark of the consumer states “Despite all of its problems, though, I loved my Pre. I absolutely loved it. I thought no phone could be better than it. But, after owning a 3G S for a day, I can safely say Apple wins another customer.” (Sean 8) Balancing Loop A balancing loop attempts to move some current state (the way things are) to a desired state (goal or objective) through some action (whatever is done to reach the goal). (Bellinger 7) In Figure 2 the Balancing Loop depicts organization learning which could change the effectiveness and efficiency of the organization goals. Figure 2 Organizational Learning The Palm Inc. needs to come up with new strategy for product improvement and innovations which are superior and exclusive when compared to iPhone, Blackberry and Android. The improvement of the smart phone must focus needs of consumers as tabled in Table A. It should also consider needs of corporate market. They must ensure that any new product launched should have minimum features equivalent to the features of existing popular brands like Apple’s iPhone, Research in Market’s Blackberry and Google’s Androids They have to come up with new strategy for marketing with creativity and avoiding hollow claims, revitalizing their selling efforts with scientific approach. The have to improve their supporting system for maintenance of the products and services to the clients. Works Cited Bellinger, Gene. "Balancing Loop." Mental Model Musings. The Way of Systems, 2004. Web. 03 June 2011. . Bellinger, Gene. "Reinforcing Loop." Mental Model Musings. The Way of Systems, 2004. Web. 03 June 2011. . Duffey, Kevin. "The Story of Palm Inc (PALM)." The Market Oracle :: Financial Markets Analysis & Forecasting Free Website. Market Oracle Ltd. Web. 01 Mar. 2010. . Gonsalves, Antone. "Palm Sales Plunge 29% -- InformationWeek." InformationWeek | Business Technology News, Reviews and Blogs. Information Week, 19 Mar. 2010. Web. 03 June 2011. . Lawson, Stephen. "Palm Sales Plummet as Pre Waits in the Wings | PCWorld." Reviews and News on Tech Products, Software and Downloads | PCWorld. PCWorld Communications, Inc., 20 Mar. 2009. Web. 03 June 2011. . News, Cbc. "One in Five Canadians Owns a Smartphone: Report - Business - CBC News." CBC.ca - Canadian News Sports Entertainment Kids Docs Radio TV. CBC.ca, 02 June 2011. Web. 03 June 2011. . Sakuma, Paul. "Palm's Sales Slump as Its New Phones Struggle - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. Web. 18 Mar. 2010. . Sean, R. "Comparison of Palm Pre and Apple IPhone 3G S | WebOS Forums." Everything WebOS — Palm Pre, Palm Pixi Forums, News, Reviews and Accessories. WebOS Forum Software by XenForo™ ©2011 XenForo Ltd., 5 July 2009. Web. 03 June 2011. . Svenson, Peter. "Palm's Sales Slump as Its New Phones Struggle - USATODAY.com." Rev. of Http://www.usatoday.com/tech/news/2010-03-18-palm-sales-slump_N.htm. USATODAY 18 Mar. 2010. News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. Associated Press, 03 Mar. 2010. Web. 03 June 2011. . Read More