Catatech Industries: The Question of Electronic Commerce Case Study

Catatech Industries focuses on providing electric measuring tools to both local and international market. Jose Fernandez founded Catatech in 1911 based on meeting their set targets or numbers. Markedly, the company’s key objective was to maximize on returns to realize high profit on sales irrespective of the management style within the firm. Since the company’s management is a lineage one, it has maintained a conservative culture in its operations.

Moreover, the firm is in business to offer quality services and products to the final users: customers. The inclusion of former electricians and professionals among sales representatives at all times attests to the urgent need for quality-service provision. In essence, the sales personnel commanded vast knowledge on the Catatech products. Catatech Industries also intended to dominate the global market with its products.

Its international expansion relied primarily on local acquisitions or takeovers, which were small. Notably, the company’s need for international presence had faced numerous challenges over the years since it had not adopted modern technology in promoting and selling its products. The company relied on the philosophy of profit maximization, but was slow to accept changes in the business world.

Additionally, Catatech Industries has tried to accomplish the use of technology under Marisa Riviera as the CIO. According to Marisa, upgrading electronic commerce was a necessity; however, it was destined to attract negatives receptions from the longtime conservative CEO and the entire community that had appreciated his roles at the helm of the company.

For instance, the implementation of Enterprise Resource Planning (ERP) led to production of better products and cost reduction in overall operations. The package integrated all functions and departments within Catatech Industries into a single component of a computer system that was able to serve needs of all the departments.

Evidently, the company worked towards cost cutting techniques by employing the use of ERP single unified software, which enabled all departments to process customers’ orders at once. Essentially, outcome-based objectives alter the attitude, perceptions, understanding, behaviors, and opinions of consumers (Pearlson & Saunders, 2013). From this aspect, it is possible to determine whether the company had reached its objectives or not.

After making numerous ratifications in the services of the company, Catatech recorded increased customer purchases, especially in 1998 where it had revenues of close to $2 billion. Carlos also ensured that they customized their products to meet the needs of the local market.

The company’s measure of outcome relies on setting measurable objectives that are time bound, achievable, realistic, and specific (Pearlson & Saunders, 2013). When objectives are clear and measurable, key stakeholders will build credibility for the value of communication hence resulting to understandable outcomes and outputs. Evidently, the whole process starts with alignment of marketing objectives that are communicable to gauge their contributions and demonstrations of the leadership team.

Catatech’s moves in the market created great impact on its operations. For instance, the use of ERB streamlined the company’s global supply chain, which resulted to reduction of inventory costs by 20%. There were also improvements in the delivery of quality products at low cost of production.

The streamlining of the global supply chain minimized the time for processing of customers’ orders since the Manufacturing, Finance, and ERB departments could process the orders on the same platform at the same time. Marketers, therefore, should be in a position to demonstrate their values and contributions to their enterprises in order to register significant benefits.

With adequate resources, time and knowledge, the objectives become achievable within a specified time. Again, if marketers find great satisfaction in the relationships and reputations among the leaders, they become confident to maximize effectiveness through proper resource allocation. In short, the objectives must be SMART since they focus on outcomes hence enabling businesses gauge their success.

Through this approach, the management can determine the business outcome without a clear set measure for success. Catatech allowed slight independence in the operations of international outlets provided they could meet the numbers. This meant that there were ways of determining or measuring success. In summing up, effective measurements call for best demonstrations of the value of work, clarity of goals and inclusion of all stakeholders in the process.

In line with accountability, the company maintained local management in the operations of all its outlets and through its Board’s refusal to accept changes that could require more funds for implementation.

They believed in traditional modes of doing business as they could engage the local electricians and professionals who had wealth of knowledge on the electrical products. For example, the evolution in electronic commerce, which required funding, attracted massive debates on the potential impacts in the market. The Board perceived the internet initiative as difficult and expensive to implement.

Marisa, on her part, was also cautious on the cost of implementing the website idea and had to convince the Board to accept it through mass education. By 1998, the Board had to contend with the new idea of electronic marketing in order to remain a float in the global and dynamic market. Marisa had focused on taking the services of Catatech Industries to the online platform so that their products can receive global attention from a click of the button in any part of the globe.

The CIO had remained persistent on the need for internet marketing such that during Executive Board meetings, she could assert her point in order to convince them. Markedly, having successfully achieved the implementation of ERB package, she could easily get the yearly infrastructure investments and operating funds. Earlier, Catatech merged with small, local firms so that it could expand its services to the global front. The acquisitions occurred after several years of attempts to go international.

Further, in absorbing qualified sales representatives, the company aimed at meeting and surpassing its objectives. The implementation of the IT system in the operations of the company will automatically minimize the overall costs of marketing, expand its regional and global market, and reduce the logistics and expenses within the management. The business environment, at the time, faced changes in technology where businesses were adopting the use of internet in marketing their products.

For example, “eHerramientas,” an unknown company had automated its services such that people all over the world could view the products at any time. So convenient and effective was the internet-marketing platform that Marisa took the initiative of convincing the conservative CEO who had remained adamant in adopting internet services.

Carlos believed that the time for such technologies had not reached and they could still make profits without it. Clearly, the state of the economy called for inclusion of internet in promoting products in order to remain competitive in the global market.

Catatech Industries has been facing numerous binding constraints that have been affecting their ability to achieve the aforementioned objectives. Some of the constraints include lack of liberal talents, the conservative management and Board members and possible inadequate funds.

The company has been targeting to expand its presence in the global stage using traditional means of marketing at a time when other businesses were adopting the use of internet to reach a large customer base at a low cost. Marisa is the only person that has been engaging the Executive Board on adoption of recent technological applications in their services. In addition, the company’s conservative culture has posed serious challenges to the achievement of the set objectives.

For instance, the Board argued that adopting the power of internet in their marketing strategies would undermine the efforts of local sales representatives and marketing. An attempt to adopt electronic commerce in their operations will imply a departure from the past autonomous and localized culture. The company had also showed fears of implementing a global electronic commerce strategy as it would be tough and expensive to execute.

The challenges that arose from the implementation of electronic commerce reveal lack of adequate technocrats who could monitor the entire process of implementation and laxity by the Executive Board to commit funds in projects in which they have little knowledge about.

In solving the constraints, the company can use its limited funds to outsource for internet services from international marketing organizations like in the US. The company’s financial strength is also a plus to the achievement of its objectives given that it recorded revenues of $2 billion in 1998/1999 financial year. Moreover, Catatech Industries have a professional group of sales representatives and Board members that Marisa can educate on the benefits of using the new technology.

Primarily, the company has an IT savvy CIO who is extremely interested in inculcating internet usage in its operations. The company can influence all the previously mentioned resources towards achieving its goals and objectives. Key processes help a firm to remain competitive in the market, produce maximum output on its success, and deliver outcomes that are specific and measurable (Pearlson & Saunders, 2013).

In essence, key processes create real value for an organization’s shareholders and customers. The current key processes include training and education on new technologies, human involvement effective communication, execution of the ERP package, desktop upgrading, automation of the sales force and knowledgeable sales representatives. These processes had steered the company above greater heights thus enabling it enjoy steady growth and un-challengeable cash flow.

The business remained competitive in the local market with revenues of $2 billion as at 1998. Clearly, the current performance level shows that the firm is meeting its goal of profit maximization and international expansion, but at a high cost. The company’s ability to customize or tailor its products to the local markets has proved that the company believes in meeting the diverse needs of its customers.

The outcomes of the current key processes are not meeting the objectives fully. The CEO’s view of rejecting the use of internet in reaching the international market at a lower cost than the present method is one cause for failure of the key processes. The present methods require high capital input hence lowering the amount of working capital. Catatech, therefore, cannot expand its services due to inadequate working capital for further investments.

Inadequate allocation of resources constitutes to failure of key processes. Further, lack of organization’s readiness to accept change can result to un-cooperation among key stakeholders in achieving common goals as evident in Catatech Industries (Pearlson & Saunders, 2013). Catatech had a conservative management that was not ready for change amidst attempts by the CIO to train them on the benefits of online marketing.

The root cause of the challenges facing Catatech Industries is unwillingness of the CEO to learn new technological developments. He is a reservist who believes in old means to meet the objectives of the firm in the present times. Markedly, Carlos showed lack of leadership during Executive Board meeting by leaving the members argue over crucial issues for the success of the business. The Board could easily manipulate the CEO given that he mostly took passive roles during such discussions.

The Catatech Executive Board, which was composed of conservatives, was also the root cause of the company’s reluctance to go global via the internet platform. In addressing such issues, the company should recognize hardworking employees such as Marisa given that she successfully oversaw the streamlining of the manufacturing, ERP and finance departments, and automation of the sales force.

Employee motivation is crucial as a way of attracting and maintaining qualified employees in an organization. In addition, the firm ought to have conducted wide market research on the benefits of internet so that the Board members could easily comprehend the essence of the initiative. The Executive Board could also have gone through training and education in partnership with international firms in order to gain competitive advantage over its competitors.

If the company could have dynamic Board members, it could minimize cost of marketing and, subsequently, improving its creditworthiness. On the other hand, online sales are prone to fraud cases and website hacking; therefore, Catatech will have to adopt high internet security to avert such cases.

In the global platform, there is constant competition that will lower the prices of Catatech’s electrical products. Catatech could also opt to do nothing and continue with the conservative management. This approach could result to greater local market control and slow growth as well.

The criterion for selecting the best option lies on the ability of the firm to understand the dynamic needs of its customers. In the current market, consumers’ tastes and preferences change frequently; therefore, Catatech should consider involving its customers in decision-making process. Moreover, consumers like comfort and, as a result, will easily accept to make orders online at any location.

In making customers’ needs a priority, Catatech will have achieved its goal of maximizing sales, producing quality products and maximizing profit levels. If the company targets to interact with most of its customers at a low cost, then going online will be the best option since it will be able to align its strategy with the IT infrastructure (Pearlson & Saunders, 2013). Catatech will be able to expand its market globally thereby maintaining a strong presence in the competitors’ regions.

In long-term perspective, Catatech will also acquire new ideas on how to improve their manufacturing process since it will attract and retain skillful employees globally. In global market, there are stiff competitions that will require the management of Catatech to conduct frequent employee trainings and seminars to inculcate new ideas in them.

Such moves will enable the firm to remain competitive in the global arena, as employees will be up-to-date on recent technological developments. In addition, there will be effective communication within and outside the company with the alignment of IT infrastructure with the marketing strategies.

Reference

Pearlson, K.E. & Saunders, C.S. (2013). Managing and Using Information Systems – A Strategic Approach 5/E. Hoboken, NJ: John Wiley & Sons.

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