Symonds Data Recovery - Prepare or Perish - Case Study Example

Strategic Management 22 May 2008 Symonds Data Recovery: Prepare or Perish I think Shakespeare won’t much toss and turn in his grave, if I alter his famous words to say that,” there is a tide in the affairs of ‘companies’, which if taken leads on to fortune”. There is a great difference between the economies prevailing during the dawn of the industrial era, and the current information driven economies. The attributes like connectivity and accessibility have extensively accelerated the pace at which markets alter and react. This augmentation in the pace of change is often manifested in the business cycles of the IT related industries. Thus an attitude of complacency in such industries is a sure shot recipe for bankruptcy. It has become imperative for industries to analyse their stature and health using a “fresh pair of eyes”, so as to ensure survival and sustenance in the fast changing market scenarios. Executive summary Owing to its very nature, the market for data recovery services is very much prone to legal, social and economic issues pertaining to the domain in which they work. It is a highly competitive market and the companies involved have to restructure their organizational strategy on a regular basis. Symonds Data Recovery is a well established data recovery firm in the UK. It had strong brand recognition and a thorough reputation amongst its customers till now. However, the entry of some start up companies has made the market for data recovery services very volatile. Symonds desperately needs to revamp and reposition its business in this changed scenario. While doing that it intends to build on its solid infrastructural base, thorough R&D background and authentic patents over many software and hardware procedures pertaining to data recovery. Symonds Data Recovery Since 1994, Symonds data recovery has been providing data recovery, digital forensics and data security services to a variety of customers in the UK. Over the years, it has managed to accumulate a wide customer base that includes many Fortune 500 companies and a lot of small businesses. This company was originally founded in the UK and has succeeded in achieving strong brand recognition and a reputation for quality service. The company’s mission statement is,” to provide effective data recovery at reasonable prices, while maintaing high level of customer satisfaction”. Symonds Data Recovery is one of the largest and technically most advanced data recovery company in the UK. Since the last five years, it has managed to be amongst the top five data recovery companies in this part of Europe. Current Situation Since the beginning of 21st century, the market for data recovery services has become quite unpredictable and volatile. A lot of factors are responsible for this change. One major factor is that a plethora of data recovery companies have mushroomed all over England to take advantage of the expanding market for data recovery services. The advent of many cheap Do it Yourself Data Recovery Software in the market has also added to the problems of the top data recovery brands. Many UK based MNCs and business houses are increasingly opting for in house data recovery facilities to enhance savings, considering the high prices charged by premium data recovery companies like Symonds. Top data recovery companies are facing an acute shortage of experienced data recovery technicians and vintage spare parts. This is adding to the costs of services. Customer awareness pertaining to the differences between charlatan and authentic data recovery services is minimal, despite the massive digitization of economy. Symonds Data Recovery is under an increased threat of loosing business to start up firms providing data recovery services at dirt cheap prices. The next big challenge before the company is to retain its position as a market leader, in the face of stiff competition provided by other leading firms. The company has ultimately decided to take a fresh stock of its state of affairs by specifying its objectives, developing relevant policies and plans to achieve these objectives and allocating ample resources to make the implementation of agreed upon plans a great success (Wikipedia, 2008). It has become imperative for the company to recognize new opportunities, and chalking out suitable plans to capitalize on these opportunities. The business vision of the company Till now, the core values chosen by Symonds have proven central to its success story and have allowed it to metamorphose from a small town firm to a national leader in the data recovery industry. The highly relevant core values chosen by the company like excellent customer service, pioneering technology and integrity form an integral part of its mission statement and have enabled the company to sustain itself in such a competitive environment (Irwin, 2008). It is these values that have enabled Symonds Data Recovery to be a prominent market leader. A commitment to these values under all circumstances has allowed this company to achieve strong brand recognition in the market. Till now the visionary goal of Symonds has been to provide quality services to its customers at a ‘reasonable price’. This part of its vision seems to be incongruent with the existing market scenario. Symonds is at present required to compete with many small firms providing data recovery services at dirt cheap prices. Some corporate customers and a majority of individual customers and small businesses prefer to hire the services of such firms. The problem is that Symonds has failed to recognize that it has already achieved its visionary goal of providing services at reasonable prices. The new market scenario demands that it strives to provide data recovery services to its customers at ‘most competitive prices’. Once this fact is accepted, it will enable the company to chalk out suitable strategies to compete in an effective way. ‘Competitive pricing’ is the need of the hour. Unless this factor is inculcated into the mission statement of the company, it may not prove to be successful any further. PEST Analysis (QuickMBA, 2007) It will be really interesting to delve on a few external factors in the macro-environment in which the given company operates: Political factors Some important political factors effecting Symonds are: Legal statutes The recent legislations have made it mandatory for companies to preserve and protect all their vital data. This is expected to expand the market for data recovery even further. Being concerned about preserving their important data, companies will definitely require the services of experienced data recovery firms during instances of data loss and data theft. Unemployment rate With unemployment in the UK soaring high, Symonds will be able to find ample qualified science and IT graduates who can be trained as astute data recovery graduates. This will more then compensate for the shortage of data recovery technicians faced by premium data recovery companies. Tax Policy With taxes on computer hardware and software going down, the institutions and organizations are expected to get further digitized. Thus the instances of data loss and data corruption are expected to increase and the data recovery industry is expected to exhibit a sharp growth. Economic factors Various economic factors expected to influence the prospective customers and the firm’s cost of capital are: Economic growth With the dilution of the existing recessionary trends, the British economy seems to be set for growth. The market for goods and services is going to expand. This will increase the individuals’ and organizations’ reliance on digital gadgets. This is expected to boost the need for top notch data recovery companies. Mandatory data protection laws will force the institutions and organizations to hire the services of premium data recovery firms like Symonds during instances of data loss. Interest rates With the interest rates coming down, Symonds’ cost of capital is expected to decrease (OSA, 2008). This will enable the company to expand in unexploited market segments and to invest in new technologies and R&D. Inflation Rate Low inflation rate is expected to nullify the high prices charged by quality data recovery firms like Symonds. This will enable Symonds to compete with the start up companies charging dirt cheap prices. Companies and firms not being under the pressure to cut down the costs will prefer to hire high quality data recovery services like Symonds. Social Factors Social factors include the demographic and cultural aspects of the external macro environment. Age Distribution With higher percentage of young people getting interested in digital gadgets, data storage devices and IT related professions; the demand for authentic data recovery companies is expected to pick up. A survey has shown that young people are less likely to backup data. Thus, this segment of the population is more likely to hire the services of data recovery professionals. Career attitudes Computers have become an integral part of all professions and academic courses. The usage of laptops, portable hard disks, USB flash drives, portable hard disks, SIM cards is on the rise. This certainly sounds propitious for data recovery industry. Emphasis on safety Companies and institutions are showing an increased preference for data safety and data protection (Data Rescue, 2008). Considering the high costs associated with instances of data loss, more and more firms prefer to opt for data recovery professionals. Technological factors R&D activity Since its conception, Symonds has been an R&D driven company. A significant part of the company’s budget is allocated for R&D efforts. Over the years, Symonds has developed various innovative software and hardware tools for data recovery. Only a few data recovery firms in Britain can afford to match up with Symonds’ R&D efforts. Automation Considering the scarcity of experienced data recovery technicians, most of the routine procedures at Symonds are automated. This has helped the company in cutting down the costs and avoiding delays due to human limitations. Technological incentives Symonds has exclusive access to various coveted hardware and software technologies pertaining to data recovery. Symonds is only one of the few companies that have Class 100 Clean Room facilities. Merely one or two companies dealing in data recovery business can afford to compete with Symonds, so far as the technological incentives enjoyed by this firm are concerned. Role of technological change With the advent of the state of the art data storage devices like USB flash drives, memory cards and mobile SIM cards, the field of data recovery is left open to only those companies that enjoy ample technological advantages and have invested amply in R&D efforts. Symonds is one such firm. Considering the above mentioned factors, Symonds is no doubt a market leader in data recovery industry and can easily modify and alter its objectives to meet the competition coming from any section in the market. SWOT analysis Any analysis of the external macroeconomic environment will be incomplete without a thorough scan of the internal environment at Symonds. This will help one in accessing the strengths and weaknesses of the company in the existing market scenario and will promote the exploitation of existing market opportunities. Strengths These are the resources and capabilities in the company that can be used to meet new objectives. Patents Symonds enjoys exclusive patent rights over various hardware and software data recovery tools. It has also got patented various intricate and innovative procedures pertaining to data recovery. This gives Symonds an edge over other companies in this industry. Strong brand name Due to its reputation for quality and punctuality, Symonds enjoys strong brand identification in the market. Good reputation amongst customers Being committed to the doctrine of customer satisfaction and principles of integrity, Symonds has a thorough reputation amongst its customers. Cost advantages from proprietary know-how Due to its exclusive rights and patents over various data recovery techniques and tools, Symonds can alter the market scenario to have a clear cost advantage over its rivals. Access to distribution networks Symonds has distribution networks and data recovery labs spread all across the UK. This makes it a first choice for customers in the event of data loss by big and small firms as well as individuals. Weaknesses Some of the following factors may be considered to be the weaknesses of Symonds. High cost structure Most of the times customers, especially individual customers and small businesses, complain about the high costs charged by Symonds. This gives the less versatile firms an edge over Symonds and depletes its market share. Lack of access to qualified apprentices Despite being one of the best data recovery companies in Britain, Symonds never took the initiative to visit the colleges and universities to hire promising IT graduates or collaborating with academic institutions to develop new technologies related to data recovery. Opportunities Their certainly exist many new opportunities for growth and diversification for Symonds. Customer preference for DIY Data Recovery Software Now day’s customers prefer to recover their lost data in the privacy of their own premises by using some DIY data recovery software. So far Symonds has failed to exploit this need for authentic DIY data recovery software provided by some reputed data recovery company. Herein lies a great opportunity for Symonds. Arrival of new technologies New data storage devices like USB flash drives and mobile SIM cards have got little share from Symonds in terms of R&D allocations. Till now Symonds has primarily focused on old or established data storage devices like tapes, floppies and hard disks. This segment definitely leaves a wide scope for growth. Removal of trade barriers Despite the unification of Europe, Symonds has failed to take advantage of this opportunity by establishing data recovery facilities and labs in the mainland Europe. Here definitely exists a big opportunity which if exploited could work wonders for Symonds. Threats Some of the nascent threats to Symonds are: Emergence of substitute products Customers are increasingly vying for off the shelf DIY data recovery software instead of hiring data recovery professionals. Emergence of online backup and automatic data backup software has reduced the customer share of Symonds in the market. However, Symonds can use this threat to its advantage by expanding into the DIY data recovery software and online data backup segment. Symonds definitely enjoys a competitive advantage over its rivals. However, this competitive advantage has primarily accrued due to differentiation advantage rather then the cost advantage. Considering the resources and assets at the disposal of Symonds, it can positively use them to create a competitive advantage culminating in superior value creation. Symonds has ample resources and experience that are superior to other firms, especially the bothersome low priced start up firms. These resources exist in the form of patents and trademarks, proprietary know-how, wide customer base, a good reputation and brand equity. Symonds has the capability to provide successful and prompt data recovery services. Such capabilities are infact embedded in the procedural aspects of this organization that can not be replicated by any other company (Forest, 1998). Till now there existed only a few data recovery firms in the UK. The rivalry amongst these firms was low and the industry was quite disciplined. The problem arose with the entry of a few maverick, starts up firms in the market that offered data recovery services at dirt cheap prices. Though the veracity and authenticity of these firms was always doubtful, still they managed to pull many customers from the individual and small business sector. This definitely displaced the otherwise disciplined market and posed a micro but potentially serious threat to most of the well established data recovery firms that offered state of the art data recovery services at reasonable prices. Slowly these maverick but small firms started developing facilities like small Class 100 Clean Rooms by the profits earned by them and started exposing much ambitious designs. This necessitated a proper response from well entrenched data recovery firms like Symonds. Such reputed firms have ample resources and capabilities at their disposal that can not be matched by the new firms, at least not by resorting to honest trade practices. To score over its rivals, Symonds can resort to many competitive moves. It can immediately gain a strategic advantage for itself by lowering the prices in the short run. This will definitely drive away the substandard start up firms from the market, perhaps forever. This will expand Symonds share in the existing market dynamics. Symonds can also choose to improve its product differentiation. It can offer versatile and dependable DIY data recovery software. Symonds can also go for providing innovative data recovery solutions for new generation data storage devices like USB flash drives, DVDs, memory cards and mobile SIM cards. Most of the low end companies do not have data recovery expertise in this segment. One thing that Symonds needs to do is to educate the lay customers about the disadvantages and risks involved in using spurious DIY data recovery software and dubious data recovery firms. It can do so by posting Search Engine Optimization articles at various online article directories. Print and digital media can also be efficiently used to this purpose. This will not only drive the customers away from the unscrupulous data recovery solutions, but will prove to be a cost effective source of advertising for Symonds. In a holistic context, Symonds is an authentic, experienced, well equipped and well endowed data recovery company that holds a considerable sway in the market. It can not only alter the market conditions to consolidate its clientele, but can choose to horizontally expand in other segments like online data backup and DIY data recovery software. The core values of Symonds combined with its technical expertise and good reputation amongst customers makes it a rival to beware of. There is no doubt regarding the fact that Symonds can successfully realign its objectives in the changing market scenario and has the wherewithal and assets to make them a reality. 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