Strategic Review: Clipboard Tablet Company

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The status quo is comforting, and yet, as most people are well aware, it is said that change is the only constant. If a company maintains a steady heading for too long, it risks wasting some of its inertia as the winds change. This is particularly true for companies that deal with technology, for there, the pace of change is far more rapid than in most industries. For a vice president of marketing to have made zero changes over the course of what is effectively six years is an egregious blunder. In this company, the current marketing vice president will have to spend a great deal of time not only analyzing the past mistakes made by a certain Joe Schmoe but also using this information as a valuable mine of data on what not to do going forward into future. After placing the concerns of Clipboard Tablet Company into a larger context, it will be seen that on a product-by-product basis, the strategies and approaches adopted previously were harmful to the company and must be completely rewritten from here.

Current State of Tablet Computing

Tablet computing has come a long way in a relatively short period of time, with the market diversifying into a veritable explosion of variety. Consumer desires and the increasingly diverse tablets that meet those needs have multiplied in both variety and specificity, which has put the burden on companies that sell tablets to hypothesize which way the market will swerve next. This is not a new problem, however; interestingly, patents on the concept of a tablet computer date as far back as Armitage et al. (2001) and as recent as Chun, Lee, and Woo (2011), though the former does contain a few humorously erroneous predictions about the future of these devices, such as that, “One or more handles are positioned at a side of the case to allow a user to hold the encased computer system while viewing the display.” From such information, it is obvious to see that guessing about the direction tablet computing will take can be fraught with peril, and yet, this is no reason to abandon the cause. Indeed, just because it is so hard to predict with certainty what technology will look like even in the relatively short-term future does not mean science has nothing to offer in regard to identifying trends. In reality, quite the opposite is true.

One of the ways in which the current research helps elucidate the state of tablet computing is by investigating such matters as how new technology comes to be integrated into consumers’ daily life. This is particularly important information in light of the introduction of the X7 tablet as a brand-new product on the market in 2012. Going forward from now, in the year 2016, it can be hoped that future new products will meet with greater success than did the X7. However, some portion of its lackluster performance may have been due to more general principles of technology and its interaction with people’s daily habits. For example, using the Unified Theory of Acceptance and Use of Technology (UTAUT) suggested by Venkatesh, Morris, Davis, and Davis (2003), Anderson, Schwager, and Kerns (2006) explained, “The Tablet PC is a new technology being introduced in various settings including faculty and student use in higher education. This study applies UTAUT prescriptively as a management tool to assess the user acceptance of Tablet PCs” (p. 429). Given the way that the theory describes a slow initial acceptance level followed by a sharp upswing, it would be wise to take this into consideration when plotting the course of price levels for future novel products. Having examined these broader angles to the issues currently facing the company, next, a product-by-product breakdown will be beneficial.

X5

The X5 is a product that began to outlive its usefulness over the course of the six-year period in which Joe Schmoe was Vice President of Marketing for Clipboard Tablet Company. It is understandable that the product was not discontinued up to a certain point, as it was designed to appeal to a certain segment of the population. There is even support for this approach; for example, some research has uncovered at least four separate types into which consumers can be divided: “As survey results point out consumers were divided into four separate groups. For each individual group there also appears to be consumer characteristics . . . [for which] exist different relationships” (Chiang, 2012, p. 1). Indeed, one of the four groups identified in that study was the budget consumer, so there is certainly a segment of the market to which a product like the X5 will appeal. However, given that the X7, introduced at the beginning of 2012, is actually priced lower than the X5—and, under Joe Schmoe’s tenure, stayed that way for the next four years—it does seem unlikely that customers want to pay more for an older product where performance was sometimes sacrificed for the sake of price. By contrast to the X5, the X7 seems an even greater bargain for the budget-minded customer.

If Joe Schmoe was unwilling to lower the price of the X5 to be at least commensurate with the X7, there were at least a couple other strategies available that would have helped the company generate higher profits. One strategy, of course, would have been to raise the price of the X7 instead, but this will be discussed further later in the context of the X7 itself. Another would have been to discontinue the product, as the financial records and the overall summaries given show that sales of the X5 began to dramatically decline as the market became saturated a couple of years into the 2012 to 2016 time-range. Alternatively, reducing the allocation of funding and other resources given to research and development might have proven prudent. Since the idea was to sell the X5 as complete, there was no need to maintain the virtually even three-way split of the resources between the three products. As shall be seen, that which was put into research and development was mostly wasted on the X5 and would much better have been used for the X6.

X6

At least, in the beginning, the X6 could have used a greater helping of funds for research and development. Overall, the entire point of the X6 is to capture a segment of the market that cares more about performance than it does about the price. The idea that consumers are currently willing to pay a premium for the best tablet computing options is supported by the work of Shim (2012), who points out that high-priced so-called “ultrabooks” originally came into the market in response to demand for the best of tablets in the form of a notebook. This provides evidence that tablets have a certain cachet with the crowd of people who are oriented toward the latest, greatest marvel of technological mastery available. Yet there were other troubles with Joe Schmoe’s status-quo approach to the problem when it comes to the X6, for the pricing scheme also had its failings.

Greater success could have been had if the X6 had been priced higher when it was popular. Now, of course, it is too late, as the market saturation point was reached a couple of years ago. However, going forward, Clipboard Tablet Company must keep a closer eye on the pricing of its flagship products, noting that when demand increases, price, too, can safely increase. This can be done without much fear, for even should the effort fail, it is one of the most easily justifiable moves a marketing vice president can make. That Joe Schmoe did not make such a transparently supportable decision is truly unfortunate, as the X6 could have been one of the biggest contributors to the company’s financial wellbeing over this six-year period. Its high price combined with its relatively high sales—at least in the early years—did help the bottom line even as things stood, but it is clear the full potential was far from reached. However, at this point, the company has little choice but to discontinue the production of the X6 and put effort into the best bet, which is the X7.

X7

The X7 has already come up in discussion in other portions of this work for good reason; it has been Clipboard Tablet Company’s single most important product for at least four years. Marketing the product as a compromise between price and performance, however, may have been a mistake, as that role was already taken by the X5, which was priced higher anyway. Instead, perhaps the focus should have been on the X7’s newness as of 2012, highlighting the fact that technology had advanced so far by the time of the X7’s release that the company could afford to put more advanced features on the X7 than were on the X5 while keeping the price low. Though things turned out well enough in the end, they could have been better had the basic approach to the X7 been altered. There are other aspects, too, that could have been improved upon.

The X7 would also have benefitted from having the lion’s share of the research and development resources. As it was the product that was likely to remain on the market the longest, it would have only made sense to put at least half of the research and development allocation into the X7. Part of the reason sales began to drop off sooner than expected for this product was that its specifications did not continue to meet industry norms as time went on. Though the low price point was a good initial selling point when the product was fairly unique and in its own class, as other companies began to catch up with Clipboard Tablet Company in regard to tablets like the X7, customers found they could get a similar product elsewhere. It can be presumed based on summaries from Joe Schmoe’s time that these similar products were priced at or even above the range of the X7, but that their features surpassed the X7’s, making those tablets better choices and ultimately losing Clipboard Tablet Company some of its potential revenue from that time period. However, those same mistakes need not be repeated in the future, for going forward with a new Vice President of Marketing, things have the potential to turn around.

Recommendations for 2016 and Beyond

The biggest obstacle with which the company is currently faced is that at this point, there are not any viable products to sell. While the X7 still exists, it is in the shakeout phase and ought to be discontinued possibly by the end of the upcoming year. The X5 and X6 can be discontinued at this point and sold as complete based on whatever inventory still remains. Those two products have gone past the point where customers found them appealing and the tablets can no longer contribute much to Clipboard Tablet Company. This means that the company must promptly begin developing new products with the goal of having at least two new tablets ready by the end of this upcoming year. That may mean dipping into reserve funds, but it is still a better alternative than having no viable products in 2017. The six years during which Joe Schmoe failed to start any new projects weigh against the company heavily, for, in terms of technology, where people often want the most current device on the market, six years is practically an eternity. Though Clipboard Tablet Company seems to have fallen behind its competitors, swift action can revitalize sales. In the future, decisions must be made more rationally. If at all possible, they must be made using cost-volume-profit analysis, a technique with which this current Vice President of Marketing is well acquainted. At Clipboard Tablet Company, the situation is not yet beyond saving.

Conclusion

When all factors have been taken into account, it is obvious that though Joe Schmoe failed to reduce allocations for the X5 or discontinue it, did not put enough resources into the X6, and ignored the vast bulk of the X7’s great potential, there is still hope. New products need to be researched and developed, and continuing the old ones—except for the X7—is a waste of time, effort, and money. As mentioned before, the cost-volume-profit analysis must play a larger role than it has in the past, as it is an industry-standard technique. Taken all together, these new choices will help Clipboard Tablet Company look forward to a more profitable future.

References

Anderson, J. E., Schwager, P. H., & Kerns, R. L. (2006). The drivers for acceptance of tablet PCs by faculty in a college of business. Journal of Information Systems Education, 17(4), 429-440.

Armitage, D. L., Roecker, D., Greenwald, J., Kapushion, J., Keen, J., & Leander, R. (2001). U.S. Patent No. 6,282,082. Washington, DC: U.S. Patent and Trademark Office.

Chiang, C. N. (2012). Consumer research for tablet PCs on purchasing factors, market segmentation and marketing strategies [White paper]. Manila, Philippines: Manila Central University.

Chun, B. H., Lee, E., & Woo, S. S. (2011). U.S. Patent No. D641,018. Washington, DC: U.S. Patent and Trademark Office.

Shim, R. (2012). Tablets impact the notebook market: Enter the ultrabook. Information Display, 28(2), 12-14.

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425-478.