AirSec Ltd. and its Objectives - Case Study Example

CASE STUDY: AIRSEC LTD. Table of Contents Table of Contents 2 Task Primary Aims and Objectives of AirSec Ltd. 3 Task 2: Pricing Strategy Merits and Demerits 4 Task 3: Benchmarking for Performance Measurement 6 Task 4: Barriers and difficulties for Airsec in Indian Export Market 7 Task 5: Risk Management 8 Reference List 10 Task 1: Primary Aims and Objectives of AirSec Ltd. AirSec Ltd. began with the efforts of three young engineers as they launched their first high-tech UAV. However, limited commercial skills and funds for business expansion were barring them from competing in the main stream market. The operational process and the work structure of AirSec mainly depend on technological innovation and creativity. The company has built its brand value in the domestic market of the UK and also focuses on the expansion of their business to new market areas. Now the company is trying to expand its business into the emerging market of India. However, a lag has been noticed in the revenue earning process of AirSec as the sales are slowing down in the existing market. This was the primary reason for AirSec to enter a market which can provide future sustainability as well as has the present need for high tech security and monitoring systems. Based on these factors, the future aims and objectives of the company will be formulated with the help of SMART methodology. Theoretically, the primary aim of AirSec is to enhance the scope of their business by developing innovative products which add value for the customers as well as enhance the brand equity of the company in the international market place. In terms of practical assessment, the aim of AirSec can be stated to extend their business operations to the emerging market of India and provide products and services of value to the target customers. The business also aims to hold 10% of the market share in India by the end of 2020 with the help of extensive and loyal customer support. This aim can be further segmented into SMART objectives in order to assess the relevance and accuracy of the aim with the business strategy. Specific: The nature of the aim is specific as the target country, the aim and the time has been mentioned clearly. Also, the mention of customer support for market development highlights the need for effective marketing and customer relationship strategies. Measureable: The market development and the performance of AirSec Ltd can be measured in quantifiable terms such as the market share and the revenue earning from Indian market. Achievable: The Indian market has shown high level of tolerance and acceptance for new technology in the recent past and if the company can design effective strategic policy, the aims is achievable. Relevant: Indian market is converting into one of the most profitable markets for tech firms which suggest the relevancy of the business objective of AirSec Ltd. Time Bound: A period of 5 years have been considered for fulfilling the objective of market share in the Indian market. The mission statement for AirSec Ltd. will be to make the world a safer place by delivering the outmost value through their products and services manufactured with innovation, creativity and care. Task 2: Pricing Strategy Merits and Demerits In the words of Schneier (2008), pricing strategies of business houses are selected on the basis of the market behaviour in which they operate. In the contemporary scenario, most of the firms are focusing on developing a competitive advantage by establishing good relationship with customers, thus the customer behaviour plays is of critical importance in pricing strategy. Taylor and Wills (2008) considered technological sector as the most dynamic and developing business sector of the international market place and operating in the concerned market not only requires business skills but also high innovation. In relation to this, one common pricing strategy followed by the business firms is price skimming where the organisation launches a product with high price in order to cover-up the capital expenditure and gradually the product price would be lowered in order to increase customer interactions (Jusoh and Parnell, 2008). Another pricing strategy similar to price skimming is price war, where the firms operating in the market engages in constant competition for outrunning each other by habitual decline in price. Berry and Yadav (2008) noted that entering a new market or market development processes also reflect low pricing strategy for gaining a strong foothold in the market. These pricing strategies have been considered as defensive by Theodosiou (2008). Focusing on the aspects of competitive or aggressive pricing, Berry and Yadav (2008) noted that predatory pricing is very effective in developing market support for business; however, it can also lead to an awkward pricing strategy which may not be accepted by the customer base. Discrimination pricing has been referred by Taylor and Wills (2008) as one of the most effective pricing strategies for unregulated markets. In order to increase customer footfall and repeat purchases, firms charge different prices from different customers and enhances the level of satisfaction directly. However, internal clashes among the customers can hamper the business processes which will not only slowdown the growth of the business but also the brand value of the firm. Considering all these pricing strategies, it can be noted that lower pricing strategies helps in an accelerated market development process, however, it also is a poor indicator of the brand value and the product quality of the business. The company can decide on the premium pricing strategy in the UK market where the advantage of brand value will support their strategy. On the other hand, the Indian market is new and AirSec Ltd needs to focus on developing the market and hence should use price skimming. The initial high price will show the quality of the product and will also attract consumer attention; price reduction of the products will also help in enhancing product sales in the market. Another advantage of using price skimming is that it supports the organisation in covering up its capital expenditure related to a product or service launch and reduces the market risks. Task 3: Benchmarking for Performance Measurement In the words of Smith (2011), benchmarking is an effective performance measurement technique which can be implemented in various departments of the organisations in relation to their works structure and nature. The benchmarking process selects crucial factors related to the work process of different groups of employees and measures their performance levels against these set standards. The criteria in the benchmarking processes are set with the help of internal or external data collection processes. The internal data is formed with the past performances of the company, whereas, the external data includes the information of the industry and the standards set by the rival firms of the company (Jusoh and Parnell, 2008). Basak and Shapiro (2006) noted that benchmarking can be used as a tool for improving the organisational productivity as well as the individual skills and performance of the employees. The benchmarking includes both qualitative and quantitative aspects of the functional segments of organisations such as the leadership skills of the employees or the growth in the sales of the company. In context of AirSec, the benchmarking process will mainly consider the requirements of the operational processes and focus on shop-floor assembly workers. The operational functions have been selected as the company will expand in a new market place and needs to streamline their operational functions so that they can reduce their operational expenses and also enhance resource utilisation in the production process. The first criteria for benchmarking will be to measure the time taken by the employees in completing every individual aspect of their tasks. For instance, the time taken for wiring of the UAV or the assembling of the UAV cannot be performed in a concurrent manner and hence needs to be accelerated. The performance of the employees can be measured in this respect. Furthermore, the benchmarking process will also include necessary conditions which will highlight the decision making and the coordination skills of the employees. AirSec Ltd can identify potential leaders from their operational process for leading the assembly line activities in a new market like India. Benchmarking will also help AirSec Ltd to improve the selection process of in-house leaders and encourage the existing employees by reflecting the scope of growth and development. Task 4: Barriers and difficulties for Airsec in Indian Export Market The fundamental nature of Indian market is that it has high government influence on the operations of the corporate sector. Merna and Al-Thani (2011) criticised the Indian market style by stating that political and religious influence on business decisions are very high in India which has also reduced the scope of the domestic firms in the international market of the world. Considering the nature of the customers, it can often be stated that price is the primary factor in the decision making process of the Indian consumers (Jusoh and Parnell, 2008). Meanwhile, other variables such as quality and brand value are being considered only by a limited group of consumers. Theodosiou (2008) stated that although India is one of the fastest growing economies of the world, the price competitive structure of the market makes it difficult to operate and sustain in the industry. The challenges of the business firms not only relate to the political influence but the aspect of country of origin is also an influential factor considering the historical relationship of India with the UK. One of the most influential factors related to the operational process in the Indian market is the unsteady nature of the tariffs and other taxation policies. The import taxes and other regulatory fees differ from state to state in India, which is one of the cost enhancing aspects (Theodosiou, 2008). Furthermore, as stated above, the price competitiveness makes it really difficult for multinational organisations to sustain in the Indian market place. Moreover, considering the nature of business of AirSec Ltd. it is important for them to get supported by a strong infrastructure, steady transportation and communication processes which are still in a developing state in the country. Briefing the analysis performed in the above paragraph, it can be summarised that the primary barriers in operating in the Indian market is the political influence, trade and tariffs, cultural influence, price focused customers, quality and brand focus limited. Task 5: Risk Management The scenario given highlights some problems with the UAV equipments which is creating serious threats for the nearby societies. India is a crowded country with high population and the problems referred towards the UAV’s of AirSec Ltd. will be harmful for the user as well as the people around it. It can distract a driver and cause accidents or get in through any windows or get tangled in wires which will lead to negative consequences for the product, customers and the victims. Although death cannot be considered as a likely scenario, but it would not be impossible if any of the above incidents takes place during the rush hours. The initial liability for any such accidents will be directed towards the customers using the drones which will also bring AirSec into the limelight in a not so preferable situation. Apart from the brand value of the business, there will be financial implications to such accidents. Also, any sort of legal actions taken against the company will indulge financial support for AirSec. Apart from this, the legal liabilities and the penalties that can be imposed by the authorities for breaking their rules and regulations will also be critical. In such a scenario, the first action will be to assess the impact and nature of risks. Once the essential elements are drawn, AirSec Ltd. can develop their strategy for handling the upcoming challenges both physiologically and psychologically. The company have to assess their financial condition for supporting their legal processes and at the same time also support the family of the victim in order to build their market value. The risk management process in relation to the given scenario will also have to consider the ethical and moral aspects for the victim and the intangible damages occurred during the accident. AirSec Ltd should embed moral responsibilities in their operational practices and consider the safety of their products, business interests as well as that of the society and its stakeholders. Reference List Basak, S. and Shapiro, A., 2006. Risk management with benchmarking. Management Science, 52, pp.542–557 Berry, L. L. and Yadav, M. S., 2008. Capture and Communicate Value in the Pricing of Services. Sloan Management Review, 37(4), pp.41-51. Jusoh, R. and Parnell, J. A., 2008. Competitive strategy and performance measurement in the Malaysian context: An exploratory study. Management Decision, 46(1), pp. 5-31 Merna, T. and Al-Thani, F., 2011. Corporate Risk Management. 4th ed. Sandwell: Elsevier Limited. Schneier, C. E., 2008. Performance measurement, management, and appraisal sourcebook. 5th ed. Harlow: Prentice Hall Companion. Smith, T., 2011. Pricing Strategy: Setting Price Levels, Managing Price Discounts & establishing price structures. 5th ed. Liverpool: Harper Press Taylor, B., and Wills, G., 2008. Pricing strategy: reconciling customer needs and company objectives. 4th ed. Chicago: NTC Business Books Theodosiou, M., 2008. Factors Influencing Degree of International Pricing Strategy: An Empirical Investigation. Marketing in a Global Economy Proceeding, pp. 246-53. Read More