Orbital Engine Company

CASE STUDY Orbital Engine Company CONTENT (1)Executive SummaryP. 3 (2)Introduction of concern BackgroundP. 4 (3)OECs objectiveP. 4 (4) Key issues HighlightsP. 5 4. 1Two Wise DecisionP. 5 4. 2Large Car executes Appeared not install to adopt OCP EnginesP. 5-6 4. 3 Marketing Lessons Can be Learned P. 6 4. 3. 1Marketing Mix and 4P sP. 6 4. 3. 2OECs Porter Five Forces P. 6 4. 3. 3Licensing and conjugation VentureP. 7 (5) ConclusionP. 7 (6)ReferencesP. 8 (1)Executive Summary In this double-dyed(a) economic environment the management of time, in the meaning of the ability to pioneer the food securities persistence with new harvest-festivals or services, becomes crucial.OEC was in the favourable position of being able to provide customer with solutions that incorporate the latest resign of engine room however, OEC was s downcast reactions to shifts in customer needs and technological advancements which did not allow OEC to realize economies of speed, level off though customers ar e willing to honour fast reactions with higher prices. Furthermore, being the first on the market with an innovative product creates a temporary monopoly and brand recognition.In this market situation the pioneering bon ton is relatively free to set adequate prices in order to recover the usually considerable cost for enquiry and reading. Once other companies come up with similar products prices drop immediately, due to the increase competition. In this situation, it becomes a great deal more difficult to repay investments in research and development. Finally, being innovate creates a positive see to it among customers and, thus, strengthens the competitive position of OEC in the marketplace. During the process, OEC had experienced the changes and made nearly wise decisions.OEC is a say-so company which has a lot of opportunities to diversify its products in cope with the market change through licensing, joint fortuity and product diversification. According to Porters model, increased bargaining effect of suppliers would lead to increased cost for major input factors, exerting heavy pressure on the critical achiever factor costs. This also heighten bargaining power of customers requires companies to consider customer needs to a larger extent. Basically, the same effect derives from the increased rivalry of existing competitors within the same industry.The severe competitive situation is even enhanced as the higher probability of new entrants increases the demand for low costs, flexibility, and economies of time. Finally, the market implies an increased threat of substitutes. Thus, OEC needs to make better their cost and quality position in order to stay competitive. (2)Introduction of business background Orbital is an world(prenominal) developer of innovative technical solutions for a cleaner world. Orbitals innovative design and its product development and operational improvement services are attracted to the worlds automobile makers and end us ers of locomotives.Orbitals headquarter is based in Perth, Western Australia, and is treatd on the Australian Stock Exchange (OEC). OEC is a pioneer for engine innovation that it keeps on trying to improve the product in cope with the market change and need. With its uncovering of fuel injection and electronic combustion process (OCP) for two-stroke design, it benefits to both vehicles and engines becomes cheaper in price and lighter in weight, which leading to a big saving on the fuel consumption with lower emission levels.This write up provides a discussion of the consequences of OECs marketing strategies and its activities that I think what OEC is do their wise decisions on, why has OEC failed to start away its engine adopted by any major Car manufacturer at the time of the case, in spite of the engine having many apparent benefits, and what marketing lessons can be learned from the fact that some of OECs engine room has been adopted by the makers of marine outboard motors in the US. At each point, I will give my recommendation and suggestion on the marketing point of views to help the company making decision. 3)OECs objective OECs aboriginal objective was to take the major car manufacturers in the US to adopt their new engine. (3) Key issues Highlights 3. 1Two Wise Decision (261) OEC had made at two wise decisions to get the major car manufacturers to adopt their new engine in the US. First of all, OEC developed a price policy for its intellectual property at the early stage that it built up a serial of licence options for car manufacturers, such as General Motors, Ford, Fiat, Jaguar and Volkswagen to evaluate the technology and needs forrader converting into their final licence agreement.Kotler et al (2007, pp. 318, 590) mentioned that, A method of entering a external market in which the company enters into an agreement with a licensee in the foreign market, offering the right to use a manufacturing process, trademark, patent, trade secret or o ther item of value for a fee or royalty more than and more for-profit and not-for-profit organisations are licensing their names to generate additional revenues and brand recognition. This brand recognition of licensing became one of the key profit generators for OEC.Secondly, OEC made another wise decision on joint venture with Brunswick Corporation, the parent of mercury Marine in January 1995, became METEOR. This joint venture helped to develop, manufacture, market and sell Orbtals SEFIS to the global market for low emission two stroke engines, which was threatened by the US anti-pollution regulations (ULEV). Kotler et al (2007, p. 591) advocated that, The most common nisus of manufacturing-based entry into overseas markets for Australian solids is that of joint venturing. The local partner could provide access to the distribution meshwork due to their knowledge with the local marketing environment while OEC brought in their joint venture technology and production know-how. Since the first step of joint venture, there were numerous of other joint ventures happening which helped OEC to rouse the two stroke engine to the market in cope with the US emission standard. 3. 2Large Car Manufactures Appeared not ready to adopt OCP EnginesAfter discussing about the wise decisions, there were also obstacles for OEC to push their OCP engines into the large car manufactures. The core reason why OEC had failed to have its engine adopted by major car manufacturers was because OEC worn out(p) too much focus on R&D than really focusing on analyzing its product was able to be adopted or pushed to the market. The marketing mix was unclear and OEC was failed to identify car manufacturers concerns and their potential interest of products.This lack of knowledge of customers needs and wants was leading to the failure. The market need was four strokes and OEC focused on two strokes. Kotler et al. (2007, p. 239) stated that, In order to design effective marketing mix strateg ies, the marketer must understand what factors within the organisation influence the purchase (or non-purchase) response of potential customers. OEC should first create a need-satisfying market offering and then found out the real-value for their customers. In addition, Manley (1994, p. 66) asserted that, Learning is a oddly critical for Orbital in the sense that the company was operating in a turbulent and intricate environment as reflected in emission legislation reviews begin undertaken internationally the number of actors in the global car industry and structural changes in the industry caused by the changing nature of international competition. In response, the companys innovation process exhibits organisational flexibility, anticipatory capabilities and responsiveness to change. Because of the above, OEC was not able to sell its technology to those large car manufacturers at that moment. . 3Marketing Lessons Can be Learned From this case study, there are some(prenominal) marketing lessons can be learned, such as marketing mix and 4Ps, Porter Five Forces, Licensing, and Joint Venture. 3. 3. 1Marketing Mix and 4Ps OEC had spent a lot of time and money on R&D on OCP and which neglected to understand what the customers need and want which is difficult to position the company to the targeted segmentation and its market. Because of that, OEC almost risked themselves into bankruptcy before 1989 if they could not gain the financial support from BHP and Australia Government.It is essential to under customers wants and need and then market the right product, right place, right promotion and right price. 3. 3. 2OECs Porter Five Forces According to this concept, the colour of competition in an industry is rooted in its underlying economic construction (Porter Strategy 1998, pp. 3). This structure is expressed by five basic competitive forces which determine the ultimate profit potential of the single industry. The five competitive forces are threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and intensity of rivalry.As of June 1994, OEC already had acquired 854 patents and its applications, but it sat on it without further development which missed out a lot of business opportunities as a pioneer in the market. Kotler et al. (2007, p. 101) asserted that, The implication is that the firm should influence the balance of forces through strategic moves, thereby strengthening the firms position. Alternatively, the strategists might bump the firm so that its capabilities factors underlying the forces and respond to them, thus exploiting change by choosing a strategy allow to the new competitive balance before competitors recognise it. 3. 3. 3Licensing and Joint Venture Through OECs success in licensing and joint venture, it gave the company a business breakthrough to position themselves in a safe market place. Most of its earnings from OEC is from licensing, development and supply ag reements. In addition, investing and expanding the business in foreign countries, there are various laws and regulations that investors should pay highly attentions, and thus, cooperating with a joint venture company topically would be the most fast and easier way to explore the market especially OEC has its technology know-how. 6) Conclusion To conclude, in this report, I have shown the effect of OECs marketing strategies on both wise and failure decision. These effects mainly consist of substantial alteration of the competitive environment in the form of unclear industry boundaries, increased rivalry, and a reduced relevance of traditional success factors. With the strategic marketing concept, it enables OEC to compete successfully in this altered economic environment. 7)References Kotler, P. , Brown L. , Adam S. , Burton S, Armstrong G. , (2007), Marketing 7th Edn, Pearson Education, Australia. Manley, K. J. , 1994, Factors Leading to Offshore Manufacture of Australian Invention s The case of The Orbital Combustion Process Engine, Murdoch University, Western Australia. Porter, M. E. Competitive Advantage. Creating and Sustaining Superior Performance, second Ed. , New York et al The Free Press 1998.