Orbital Engine Company

CASE STUDY Orbital locomotive locomotive Comp all CONTENT (1)Executive succinctP. 3 (2)Introduction of cable BackgroundP. 4 (3)OECs objectiveP. 4 (4) draw issues HighlightsP. 5 4. 1Two Wise DecisionP. 5 4. 2Large gondola constrains Appe ard not ready to adopt OCP EnginesP. 5-6 4. 3 market Lessons fecal matter be acquaintanceable P. 6 4. 3. 1Marketing Mix and 4P sP. 6 4. 3. 2OECs Porter Five Forces P. 6 4. 3. 3Licensing and word VentureP. 7 (5) ConclusionP. 7 (6)ReferencesP. 8 (1)Executive Summary In this severe economic milieu the management of time, in the meaning of the baron to pioneer the merchandise with refreshful harvest-homes or services, becomes crucial.OEC was in the favourable status of world able to provide customer with solutions that co-ordinated the latest state of applied science however, OEC was abate reactions to shifts in customer inevitably and proficient advancements which did not allow OEC to realize economies of speed, unconstipated th ough customers are willing to take note fast reactions with higher prices. Furthermore, being the runner on the commercialize place with an innovative product creates a temporary monopoly and brand citation.In this market situation the pioneering partnership is comparatively free to set adequate prices in order to recover the usually substantial cost for research and teaching. Once separate companies come up with similar products prices deteriorate immediately, due to the change magnitude competition. In this situation, it becomes stripes more difficult to re turn out investments in research and development. Finally, being innovate creates a positive image among customers and, thus, strengthens the agonistical arrange of OEC in the marketplace. During the process, OEC had experienced the changes and make more or less quick of scent decisions.OEC is a authorisation company which has a lot of opportunities to diversify its products in neck with the market change by dint of licensing, reciprocal jeopardise and product diversification. harmonize to Porters model, increased negotiate post of suppliers would lead to increased cost for major input cistrons, exerting heavy squeeze on the critical succeeder factor costs. This also enhanced bargaining world power of customers requires companies to consider customer subscribes to a larger extent. Basically, the kindred effect derives from the increased rivalry of existing competitors within the same assiduity.The severe competitive situation is level enhanced as the higher probability of bare-assed entrants increases the demand for low costs, flexibility, and economies of time. Finally, the market implies an increased holy terror of substitutes. Thus, OEC needs to re take a crap their cost and quality position in order to stay competitive. (2)Introduction of business mount Orbital is an international developer of innovative skilful solutions for a cleaner world. Orbitals innovative des ign and its product development and operational modifyment services are attracted to the worlds auto makers and fetch up drillrs of engines.Orbitals headquarter is based in Perth, Western Australia, and is traded on the Australian received 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 breakthrough of fuel slam and electronic combustion process (OCP) for ii- pellet design, it benefits to two vehicles and engines becomes cheaper in price and lighter in weight, which leading to a big parsimony on the fuel consumption with frown emission levels.This report provides a intelligence of the consequences of OECs merchandising strategies and its activities that I debate what OEC is make their wise decisions on, why has OEC failed to pretend its engine adoptive by any major Car manufacturer at the time of the case, in spite of the engine having many apparent benefits, and wha t merchandising lessons tail assembly be learned from the fact that just approximately of OECs engineering science has been adopted by the makers of marine out(a)board motors in the US. At each point, I will show my recommendation and suggestion on the merchandise point of views to help the company making decision. 3)OECs objective OECs differentiate objective was to uprise the major car manufacturers in the US to adopt their new engine. (3) Key issues Highlights 3. 1Two Wise Decision (261) OEC had make at two wise decisions to get the major car manufacturers to adopt their new engine in the US. First of all, OEC substantial a pricing policy for its skilful property at the early power point that it built up a series of evidence options for car manufacturers, such as General Motors, Ford, Fiat, Jaguar and Volkswagen to evaluate the technology and needs before converting into their final licence agreement.Kotler et al (2007, pp. 318, 590) mentioned that, A method of ac counting entry a distant market in which the company enters into an agreement with a licensee in the foreign market, offer the pay off to use a manufacturing process, trademark, patent, trade secret or other item of value for a fee or royalty more than and more for-profit and not-for-profit organisations are licensing their names to scram 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 join threaten with Brunswick Corporation, the parent of hydrargyrum Marine in January 1995, became METEOR. This conjunction venture helped to develop, manufacture, market and sell Orbtals SEFIS to the orbicular 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 to the highest degree common form of manufacturing-based entry into overseas markets for Australian firms is that of joint venturing. The local partner could provide gravel to the distribution network due to their knowledge with the local marketing surroundings small-arm OEC brought in their joint venture technology and production know-how. Since the starting line step of joint venture, on that point were numerous of other joint ventures happening which helped OEC to push button 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 actor why OEC had failed to have its engine adopted by major car manufacturers was because OEC played out too much focus on R&038D than really focus on analyzing its product was able to be adopted or pushed to the market. The marketing coalesce 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 foursome strokes and OEC focused on two strokes. Kotler et al. (2007, p. 239) verbalise that, In order to design impressive marketing mix strategies, the marketer must(prenominal) envision what factors within the organisation specify 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) assert that, Learning is a peculiarly critical for Orbital in the palpate that the company was operating in a turbulent and complex environment as reflected in emission legislation reviews let down undertaken internationally the number of actors in the world(prenominal) car industry and structural changes in the industry caused by the changing constitution of international competition. In response, the co mpanys 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 several marketing lessons place be learned, such as marketing mix and 4Ps, Porter Five Forces, Licensing, and crossroads Venture. 3. 3. 1Marketing Mix and 4Ps OEC had spent a lot of time and money on R&038D 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 nonstarter 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 durability of competition in an industry is root in its underlying economic structure (Porter Strategy 1998, pp. 3). This structure is expressed by five basic competitive forces which view the ultimate profit potential of the several(prenominal) 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 fit of forces through strategic moves, thereby beef up the firms position. Alternatively, the strategists might computer memory the firm so that its capabilities factors underlying the forces and do to them, thus exploiting change by choosing a strategy appropriate 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 strong market place. to the highest degree of its earnings from OEC is from licensing, development and supply agreements. 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 locally 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 effects of OECs marketing strategies on both wise and failure decision. These effects mainly contain of substantial alteration of the competitive environment in the form of unclear industry boundaries, increased rivalry, and a reduced relevancy of traditio nal 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 Inventions The case of The Orbital combustion Process Engine, Murdoch University, Western Australia. Porter, M. E. Competitive Advantage. Creating and Sustaining shining Performance, 2nd Ed. , New York et al The Free Press 1998.