Caesar IT Services: Marketing Multiple Value Propositions Harvard Case Solution & Analysis

Caesar IT Services: Marketing Multiple Value Propositions

Introduction:

Caesar group is an IT firm that competes in the Dutch market for several years. The Dutch market offers two types of services that are professional IT services and IT outsourcing. The Caesar Company offers only the first kind of IT service. Professional IT service can be given either on a daily rates, or on hourly rates, and the term is often used as body shopping by the company. The scope with respect to body shopping is defined by the customer who avails the services. The Dutch industry in terms of Information Technology services is growing with an average growth rate of 7.8%. In addition to that, the market is fragmented with approximately 30,000 different suppliers.

The Caesar Group was founded by Hans Van Der Kooij in 1993. The company is operated in the Dutch professional IT services market. Exhibit 6 in the case study shows company sales of €32 million that was made with only 300 employees. The company’s primary services include body shopping and the expertise in terms of technology include Java, Progress,.Net, Microsoft infrastructure, Process optimization, BI and Oracle. The founder of the company was encouraged by the commitment made by Wal-Mart about sharing company’s profits with the customers. Kooij knows that the competitive advantage can be achieved only through making development and skills enhancement in their employees. By 2005, the company as launched Time-Value projects in the marketplace and thus marketed two value propositions that are Time-Value projects and body shopping.

Analysis:

Critical issues:

Caesar prime value proposition consists of Time-Value projects and body-shopping. The company has used integrated organizational methods under one brand name. Body shopping consists of offering customers with experienced and eligible human power on a daily or hourly rates. On the other hand, the company has introduced Time-Value project that is based on providing IT related services commonly as IT projects within the budget of the customers along with its timely delivery. The company has used these two value proposition under the brand name of Caesar and used integrated organizational methods for this purpose. These in turn create several issues for the company that creates frustration, anxiety and stress between the employees and management of the company.

These issues include integrated name of the brand directed to disseminate marketing proposition towards forthcoming customers. In addition to that, the next major problem faced by the company was related to the sales of the company. The sales manager of the company was facing problems in selling body shopping and Time-Value under the same portfolio. Another major issue faced by the company was the level of stress and anxiety that has been aroused because of the confusion that in turn created disturbance, contradictions and lack of cooperation among employees and management of the company.

In addition to these issues, human talent is critical in the IT services and thus employees with compulsory proficiency and technological acquaintance is utterly essential in the IT market. There was an increasing scarcity of high-quality information communication technology professionals, and that has become the foremost concern for the industry. Companies engaged in information communication technology were more and more facing the difficulty of hardly being able to accept agreements because of severe deficiency in terms of personnel.

Along with that, the Information Technology industry is quite fragmented in terms of suppliers. There are a lot of multinational companies competing in the market along with small companies as well. In addition to that, Caesar lacked in terms of brand awareness in the market. Initially, the company has adopted a cost leadership strategy that was based on providing good people at a logical price that was approximately 60% less than the industry standards. Later in 2001, the bubble crisis emerged, and the company’s strength of cost-leadership became a major threat for the company. During the crisis, all the major competitors of the company were forced to lower down their prices below the cost, thus the competitive advantage of Caesar became abolished.

Difference between Time-Value Projects and Body Shopping:

Body Shopping:

The Dutch IT market is offering two kinds of IT services that include professional IT services and IT outsourcing. The company is only using first one and thus engaged in providing professional IT services to the customers. IT professional services are generally given on  hourly or daily basis rates. This category of services is popularly known as body-shopping at Caesar IT services. Body-shopping is a project that dealt as a fixed price and known as one of the initial value proposition offer made by the company. With respect to body-shopping, the management at Caesar always enjoyed high rates of loyalty along with high satisfaction rate. The employees are found to be loyal because of the company’s commitment to the employees with respect to their personal growth and development.....................

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