Atlantic Computer Case Study - 1279 Words

Introduction Atlantic Computer developed a product, the â€Å"Atlantic Bundle†, to meet an emerging basic server market. The Atlantic Bundle is a Tronn server coupled with the Performance Enhancing Server Accelerator software tool â€Å"PESA†. Atlantic Computer must decide on the pricing strategy. Situational Analysis The external analysis is as follows: †¢ Customers: The first customer identified has a primary need to host websites, â€Å"Web Server† customer. The second customer identified has a primary need for file servers that help layout designers share graphic, text, and layouts, â€Å"File Sharing† customer. Customers in these segments appear to be the ones that will benefit the most from the PESA tool. †¢ Competition: The primary competition†¦show more content†¦Alternative Courses of Action Free PESA Software with Purchase. Rather than regarding the PESA RD as a sunk cost, I chose to distribute the costs to every server. The price under this route was determined to be $2,122 (see Appendix B). The primary drawback is that a customer who would have normally purchased the Tronn without the software would be charged a higher price ($2,122 vs. $2,000). Continuing with the tradition and norm of free software, staff would not have to be retrained and customers will not feel alienated. Furthermore, the one-bundle price could easily be transitioned to on-line sales, and the low price will increase market share. The â€Å"free† software could create an illusion of low perceived value. Finally, the lower price will result in lower profit margins, and it does not take into consideration the value advantage received by the customer. Competition Based Pricing. The price under this route was determined to be $3,400 (see Appendix C). Under this route, the company will earn more profit per bundle sold. Additionally, minimal effort is required to determine the price. However, the competition based pricing creates indifference between the â€Å"Atlantic Bundle† and its competition. The higher price will also reduce market share and could stir a pricing war. Cost-Plus. The price under this route was determined to be $2,245 (see Appendix D). Atlantic would gain market share under this route as the price is lowShow MoreRelatedAtlantic Computer Case Study1225 Words   |  5 PagesAtlantic Computer: Case Study Strategic Management Mitchell D. Upchurch Dr. Johnny Eluka July 19, 2011 Amidst an emerging U.S. marketplace opportunity, Atlantic Computers tasked the newly appointed product manager, Jason Jowers, with marketing and selling the company’s new product, the Atlantic Bundle. A server, software combination, the Atlantic Bundle would offer performance up to four times faster than the competitions standard speed, all within one machine. External Analysis: ExternallyRead MoreAtlantic Computer Case Study1535 Words   |  7 PagesAtlantic Computer is a large manufacturer for servers and other technology products. They have seen great success in the last 30 years since they have been competing in the market. While they have previously dominated the high-end server market, they are looking to expand to an emerging market, the basic server market. In order to do so, they have developed Tronn along with the Performance Enhancing Server Accelerator, otherwise known as PESA. Because Atlantic is penetrating new market segment thanRead MoreAtlantic Computer Case Study - 11092 Words   |  5 PagesATLANTIC COMPUTER Atlantic Computer, a large manufacturer of servers and other high-tech products, has assigned Jason Jowers the responsibility of developing the pricing strategy for the new ‘Atlantic Bundle’. 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