TerraCog Global Positioning Systems: Conflict and Communication on Project Aerial Harvard Case Solution & Analysis


            TerraCog has been the most successful private owned high tech firm that has been developing GPS global positioning system and other same kind product for the consumer market. Currently, the company has been facing severe competition from a competitor’s new product that is launched by Posthaste “Birds1”. With the immediate success of the product, TerraCog is also planning to launch a similar product with the name “Aerial”. However, prior to the launch of the product, the company has been facing cost issues, which are considered quite high as compared to competitor’s price.

Situation Analysis

            The reason why TerraCog actually ended up in this position where it had to launch a similar product like the competitor’s product is because of the constant growing pressures from the retailers, customers and the market. Being one of the most technically advanced high tech firms, the customers’ expectation from the Terra Cog has been quite high, therefore, it actually had to launch innovative product that is similar to that of the competitor.

            It has been a history of the firm that it does not enter the market with the first mover advantage. In fact, TerraCog has been well known for its copy strategy, where it launched the similar product with improved technology and innovation, which ends up beating the rival brands.

            With the increasing pressure to launch satellite imagery, TerraCog decided to launch the similar technology because the customers in the market have been looking for something different. Since TerraCog was unable to justify the sales rep and the customers, therefore, Richard Fiero the president of the company decided to launch satellite imagery to satisfy gadget appeal. The company decided to redesign the existing GPS platform for better results that can be achieved quickly.

            TerraCog came into this position because it had always been that company, which tries to developnewer and improved technology. Keeping this in mind, TerraCog decided to launch Ariel, which was led by Emma Richardson. She was designated to launch the product or the brand in the market with complete control over the cost estimates, innovation and timely launch of the product in the market.

Key departmental and individual objectives

            As the case states, the major issue, which has led to the critical situation, is the fact that with the launch of Ariel satellite imagery, the company has to decide the price which is quite higher as compared to that of the competitor. The price that has been set by the production department is $475 after cost reduction. However, the company has to bring it down to $400 to compete in the market.

            The key departmental objective of the production department led by Tony Barren is to provide optimum quality product in the market. In spite of constant efforts to reduce the price, his team has been unable to bring it to a $400 price.

            Moreover, the sales department is demanding a total price of Ariel to be around $400. The department is headed by Ed Pryor. Allen Roth is more concerned with the design and quality of the product, because it is his responsibility to look after the quality and should deliver a product that is up for the market and can sustain the brand in the market. Harold Whistler is also of the view that the product needs to be stopped from being launched; instead the company should launch it in the next six months with improved technology.

            Becky Timmons is not ready to cut the profit margins, which is another suggestion to make the product market competitive. Since all the department heads and the individuals have posed different objectives and have rather seen as per their advantages, therefore, it has actually led Emma Richardson in a critical decision to decide the future of Ariel.

Defend top department, top individual

In the current situation, the different departments have different objectives all of which are related to the success of the firm. However, since all of them are from different departments, therefore, the vision and the objective of each one are different. The decision of Tony Barren to actually launch the product with the price of $475 is quite reasonable as he has put in quality raw material and components to develop the product.

In the past, while he actually compromised on quality led to poor product outcome. The reason for a demand in price as per the sales department is also justifiable. To compete in the market, either one has to have a better brand or a cheaper brand. In the current situation, Ariel does not have a unique proposition; therefore, the price of the product has to be market competitive.......................................

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