Datasquirt Ltd Company Analysis - Case Study Example

Name: Professor: Institution: Course: Date of submission: DATASQUIRT LIMITED: Table of Content: 1.1 Abstract: 1.2 Introduction: 1.3 Datasquirt Ltd Company Analysis: 1.4 Organization structure of the Datasquirt Ltd Company: 1.5 The five forces analysis of the Datasquirt Ltd Company: 1.6 Life Cycle Analysis for Datasquirt Limited: 1.7 Conclusion: 1.8 Recommendation: 1.9 References: Abstract: Data squirt limited is a medium sized company that was founded in the year 2001 and has an employee base of between 11 to 50 employees. The company has its core business in the information technology and services industry. Its activities are basically, contact centers, multichannel non-voice communications as well as the social media. The company though based in Auckland in New Zealand, it also has a business presence in most countries like The United Kingdom, Australia, Germany and the United states. Introduction: Data squirt limited is a publicly listed company that deals mainly in the technology and software development fields. Datasquirt Company was founded in the year 2001 as an experimental company and offered its shares to the public in 2004a public company dealing with the development of software for the information technology and the services industry. It is based in Auckland in New Zealand. Its core business is a software development specifically the non-voice, multichannel contact software solutions used to manage applications like in call centers, debt collection, visa application, status updates, and dispatches for jobs, voter registration or election management as well as competition management Data squirt limited is a medium sized technological company that develops software for use in the information technology industry. Major organizations around the world that operate in the information technology field incorporate the CONTACT™ software- a cloud-based software for call centers to manage and improve service delivery to their customers in record keeping and report and productivity assessments in their call center offices. This software has been offered as (saas or software) as a service since the year 2004. It has been offered as a cloud e-mail and SMS which was expanded to include offering of web chat and web fax. The main advantages of using contact software as opposed to other applications are that the software is used as a service which can be hosted somewhere else. This separation has its advantages in that operating costs are minimized by the company that uses the software as the technical problems are averted since operations are separated from company operations. This is evidenced by the running of the company, whereby since inception, there has never been a downtime in the system though the system is still simple to implement and also be used by the staff. Some of the main customers for Data squirt’s software solutions are Fontena, Coca cola armatil, Amiway, Silver jet as well as Royal Bank of Scotland. Others include the Royal Mail Group and the Wokingham Borough Council in the United Kingdom. Today’s contact centre has been put under extreme pressure to really engage efficiently and effectively with customers who desire multiple channels together with social media applications. Thus to ignore consumer expectations puts the corporate brand at great risk. Aaron Ridgway, managing director data squirt ltd. Data squirt has built an innovative technology and a sizable, loyal base of customers. The company is a recognized leader in the global market for enabling the contact centers to communicate with their clients in an easy way during real time by use of the popular channels like e-mail, SMS, fax web chart and also social media like twitter. The company’s customers like the Wokingham borough council and the royal mail group in the United Kingdom have incorporated the use of the Contact software to manage social media based service delivery especially twitter in their contact centre. Contact software enabled Wokingham to take the first position in the U,K public sector service category with their e-mail based communications getting a score of 87.62% as opposed to an overall first 50 e-mail average of 74%. The company’s contact software won the first position in the U.K call centre’s helper. Datasquirt Ltd Company Analysis: Data squirt ltd is an information technology based company that mainly deals with the development of software and supplies the service to other buyers (customers). The main products that the company has developed are user software that enables customers to monitor their workforce’s effectiveness and efficiency. This is trade mark soft wares like datasquirttm and contacttm both of which have made the company become a market leader. Organization structure of the Datasquirt Ltd Company: Formed in 2004, the company’s main offices are located in Auckland New Zealand. It had the express mission of being the market leader in offering technological solutions in the south Asian market especially New Zealand and Australia. It has aboard of directors lead by Mr. Aaron Ridgway (managing director, C.E.O, Executive director), Mr. Mark Loveys (chairman, non-executive director), Mr. Robert Ellis (non executive director) Mr. Jens Neiser (non-executive director). Departmental heads for research and development, technology as well as marketing are also important. Though the company was incorporated in New Zealand it has subsidiaries in Australia, Germany the, U.S, and the United Kingdom. Thus from its humble beginning in Auckland this is a sure evidence of growth. Though the subsidiaries operate the same line of business, other products are developed. The five forces analysis of the company: Using porters’ five force analysis model, the company’s growth strategy can be seen. What has been witnessed with Data squirt ltd was early growth in its formative years, maturity evidenced by creation of subsidiaries in non-home markets, use of trademarks as brand recognition grew and a loyal customer base grew then due to competition and un-favorable economic conditions in the world markets intensified, the last resort was to look for foreign mergers. a.) Threat of new competition it is a known factor that in a new and profitable market, first abnormal profits are realized which in turn attract new players who will in the end constrict the market, decreasing the profits. Though there was an entry of other layers the company has favorably held its own emerging as a leader in the industry. b.) Threat of substitute products, the industry by its very nature is a truly competitive one where due to emerging technologies, remaining technologically ahead requires massive investment in research and development. Thus the nature of the competition is in the form of startups, mostly underfunded with an undeveloped infrastructure. Thus for a well grounded company weathering the competition is relatively easier. This was evidenced by the resilience of data squirt’s product in the market, it has a loyal customer base. c.) Bargaining power of the buyers (customers); since it is a factor de fined as the market of outputs, the inherent ability of the customers to exert pressure on the firm can be a form of threat to the company operations as it affects the customers’ sensitivity to price changes. In most cases this are factors affected by: 1- Degree of dependency upon the existing distribution channels. 2- Availability of buyer information 3 - The buyer volumes. 4- Where industries have high fixed costs, bargaining leverage is realized. In the case of Data squirt, for all this factors the company has managed to overcome them by first establishing itself in the market with original and strong products (data squirttm and contacttm) which are market leaders, giving the company leverage over its customers. This has in essence, given the company the differential advantage of its product. d.) Bargaining power of suppliers: It is as well referred to as the inputs market: if there are suppliers of components, labor and expertise (services) to a firm, they represent a bargaining front for the firm. The workers can refuse to work for the firm or in other cases charge exorbitantly. These factors can be differentiated as: 1- Degree of differentiation of inputs 2- Presence of substitute inputs 3- The strength of he channels for distribution 4- Employee solidarity. Companies with large workforces are in most cases affected by labor based issues as either the workers belong to unions and thus have enormous bargaining power. This can be in the form of strikes or pay increment demands. But for a company with a small dedicated staff like data squirt’s labor relations are minimal. e.) Intensity of competitive rivalry: It is viewed as the main determinant of the industry’s competitiveness. Factors that are used to examine the intensity of competitive rivalry are; 1- Sustainable competitive advantage through innovation at the line –of – business industry level is the real determinant in the company’s projection strategy. For data squirt ltd, innovation has been its differential advantage in the market as its products can effectively compete against substitute products. 2- Powerful competitive strategy- to survive in the information industry one must be competitively astute, always ahead of the industry. It is a field where new products are developed almost daily. The diversification of marketing platforms, for example, the entry of smart phones in advertising products, creates new playing fields. Thus entry into the cloud computing sector by data squirt allows it an opportunity for growth. Mobile money also presents another sector for involvement. 3- Level of advertising expense the budget available for advertising can make or break a company’s operations. It is a major issue with start-ups that are mostly undercapitalized affecting their profitability. Having a stable distribution channel, affords data squirt ltd a competitive edge in its market segment. Life cycle analysis of Datasquirt ltd: It is used to analyze the environmental impacts of the activities of the company from its operations i.e. product flow model, from creation to grave literally (from raw material extraction, processing, manufacture, distribution, use, repair and maintenance, disposable or recycling). This lifecycle analysis helps to avoid a narrow outlook on environmental issues. It makes an inventory of the relevant energy and material inputs and environmental releases. Evaluates the potential impacts associated with inputs and releases. Result interpretation. Below is a Datasquirt material flow model: Raw materials energy processing energy manufacture of components (computers, phones) Energy Application software. Energy is used in terms of millions or wartts by the industry affecting almost the whole economy, few mitigating factors can alleviate the impacts in the environment i.e. more CO2 emitted, more tax paid. Therefore, it leads to the decrease in the company’s revenues. The Australian Labor government levied a new carbon tax on July 10th 2011; on the main top 500 Carbon emitters or environmental polluters, $23 per tone of Carbon emitted. Thus, the stock market felt the impact as company’s using energy intensive activities like the steel industry energy generation coal, airlines and telecommunication. Thus Companies dealing in technology and Data management center that need massive power to operate were mainly affected. Step Analysis for Datasquirt Limited: Step analysis is a framework used to analyze the social, technological, Economic as well as political factors that a firm faces so that it can develop a sound stability for its operators. Datasquirt being a software development firm faces social challenges in the form of the environmental effects of activities as part of a wide industry. It’s a line of business associates it with major polluters. These are represented by energy processors, mines, processors of minerals as well as manufactures through dealing in relatively clean products like software. They are dependant on components i.e. computers, phones etc which as a whole are energy intensive users. Therefore are liable to CO2 emission penalties becoming a weakness. Technological- As a firm, technology is its strong point with a vision of being world leaders and a mission of innovativeness, the firm is well placed in the value of the industry. Economic- Economic challenges embodied in difficulties of getting enough capitalization for R & D, building a reliable supply chain or distribution channel and maintaining skilled personnel are the major challenges facing the firm. Thus coupled with nature of industry where innovative maintenance creates market enzymes that need a fast adjustable strategy. This is the case with Datasquirt, through innovative, its brands are market leaders which has enabled access funds and suitors. Live ops a bigger conglomerate acquired it at a better price translating to a return on capital for its shareholders doing the upheavals on its terms. Main shareholders being the options of buying into live-ops while operations and brands remaining Datasquirt in Newzealand in November 2011. Political - Though political factors aren’t a major that as it has customers who are political units worldwide. In fact it is a strong point as its software is used by town councils, using elections monitoring refastening. Through legislation for Carbon emission tax could be the only draw back. Conclusion: The company had humble beginnings but grew into a major player in the software development sector due to the dedication of its founders. Having been described as an experimental company by its founders, it managed to be listed on the stock exchange with stock code of DSQ. A market capitalization of $10m, due to its vision of innovativeness two major brands were created; contacttm and datasquirttm which have become world renowned in the non-voice, multichannel platforms. During its existence as a publicly listed company, it managed to create subsidiaries in Europe, North America and Australia. In the period of operation as a public company few if any dividend was paid to its shareholders as this period was characterized by economic upheavals worldwide especially in the developed economies of Europe and North America. It was acquired by major American company- Live-ops in November of 2011 at $13m with company brands retaining their identity while company operations being run from its former headquarters in Auckland. Recommendations: The company’s competitive edge should have been maintained by diversifying its products to enter into the voice market especially with the advent of the Smartphone which has opened new marketing windows for software developers. Stabilization of the distribution channels for its products cements market leadership. Also the company should have considered entry into high volume sales regions of the south East Asian region, India and Africa. These regions had lesser effects of the economic downturns as opposed to North America especially the United States and Europe. References: www.datasquirt.com www.linkedin.com/company/datasquirt-ltd www.businesswire.com/news/home/20111220005418/en/LiveOps-Completes- Datasquirt-Acquisition www.investsmart.com.au/shares/asx/DATASQUIRT-LIMITED-DSQ.asp www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=DSQ Read More