Situational Analysis
Safety Systems Technology has vast experience in the production of fire and gas detection systems. Since 1988, the company has been dedicated to this course. Lately, the company expanded its operations to encompass eco-safety solutions and the development of integrated turnkey systems.
Despite these expansion programs, the company’s main products, which are also its main income earners, have remained its traditional products such “Alarm Control Panels, Fire Extinguishers, Alarm Signals, Gas Sensors, and Fire Detectors” (safetysys.com).
Currently, the company has an enviable customer base in diverse industries in different regions. The following are some of the industries in which the company has clients.
- Oil and gas exploration and drilling
- Turbine manufacturers
- Hazardous waste
- Chemical storage facilities
- Sewage treatment plants
- Ships and tankers
- Utilities
- Automobile manufacturing
- Refrigeration
- Nuclear facilities
- Alternative energy
- Industrial manufacturing facilities
Over the years, the company’s growth in all its lines of business has been impressive. However, the desire to tap into other markets has necessitated a marketing plan. The decline of most industries following the 2008/2009 global economic downturn has further aggravated this situation.
When many industries went under due to the harsh economic conditions in 2008/2009, the company’s earnings dropped significantly. Considering that the United States was one of the countries greatly hit by the crisis, the company has opted to diversify its risks to other regions to avoid future market frustrations.
The company, therefore, intends to invest in other regions that have shown little economic ties with European economies such as Asia and the Middle East. In many instances, an economic crisis that hits the United States, has somehow hit other European nations.
Therefore, capitalizing on the region alone is unwise. By finding and establishing distribution centers in the other regions, the company will be developing a strong economic foundation that economic ripples rocking one region will not easily affect.
Most importantly, household demand for safety solution products has been on the rise. Today, many people prefer having alarm systems in their homes (Association of Fire Chiefs International 153).
This is against old trends where only the rich, mighty, and VIPs had alarm systems in their homes. The company’s target is to reach out to this growing market to increase its earnings.
Market Summary
It is prudent to acknowledge that SSS exists in an intensely competitive industry. The company continues to face aggressive competitors in all its spheres of business operations. The safety solutions market is characterized by frequent product innovation, and technological advancements.
SSS has made tremendous strides to level these challenges. However, its continued market dominance relies on its ability to develop and offer new innovative products and services.
Currently, the demand for safety solution products has continued to rise steadily. New markets have also emerged thereby diffusing the stiff competition from big companies. Traditionally, these products have been manufactured for large corporations and established institutions.
Marketing Strategy
Mission
SSS’s mission is “to protect lives, property, and valuable equipment by providing high-quality and reliable fire and gas detection systems developed through the use of advanced technology and innovation” (safetysys.com).
Marketing Objectives
SSS hopes to build awareness of its products to potential consumers globally. In the process, the company hopes to position itself to tap into the corporate and household markets in the same stride.
Both the demand in the industrial sector and households has been growing and the company should tap into it. The company’s exploits in the industrial and allied sectors have already proven effective and, therefore, same strategies should be used to harness the potential of household demand.
Although the company prides in brand recognition and good image, it should further its image building strategies by participating in trade shows, exhibitions, and social responsibility events.
Specifically, the company should undertake two social responsibly events every year, participate in at least one international exhibition annually, and attend at least one trade show locally.
Financial Objectives
The year-ended June2012 saw the company attain its financial target of $ 1 million. This was possible due to well-structured marketing strategies. In 2013, the firm aims to reach $1.3 million target. This is not impossible considering the marketing strategies put in place for the period.
Target Markets
SSS’s traditional market will still be given first priority. However, other emerging markets already identified in Asia and the Middle East will be explored. A big percentage of the company’s earnings have traditionally come from the US market. With the exploitation of additional markets, earnings will most certainly increase.
The company’s market in terms of products is divided into household and corporate. For years, industrial products have formed the bedrock of its earnings. Attention will now be divided equally between the two lines considering the steady growth of household demand for the company’s products.
Cost Leadership Strategy
The company aims at adopting selective cost leadership strategies. In regions like California where its market share is huge, it should maintain average industry prices to capitalize on its market strength to increase profitability. Areas where it lags behind should have prices lowered to increase customer base.
Lowering prices to capture low-end market that would otherwise be left will involve several strategies. First, the company should increase its efficiency. It should also involve in optimal outsourcing, and acquire cheap raw materials.
Differentiation Strategy
The company intends to employ the use of differentiation strategy by offering unique high quality products liked by customers. If customers believe products are unique, they will be willing to pay even premium prices for them. This way, the company will avoid cutthroat price competitions.
Backward Integration
SSS aims at adopting backward differentiation to reduce its costs. By acquiring a stake in suppliers of its raw materials, it will be able to have not only control, but also the ability to reduce significantly, its spending. For instance, the company spends a lot of money paying steel companies that supply it with raw materials.
If it can acquire the companies, it will be able to get the materials more cheaply because there will be no additional profits to costs. Backward integration opens opportunity for cost leadership. Cost leadership, in this case being a firm’s dedication to compete based on price.
The success of this approach requires the company to charge the lowest prices in the industry. This is only possible when a company cuts its costs significantly. Backward integration gives this opportunity to cut cost.
SSS Customer Analysis
SSS’s consumer profiling can be differentiated in terms of its products since each product attracts a specific group of customers.
Fire Detectors
A rule-based profile of customers purchasing fire detectors depicts that they are mostly companies in different industries. Their potential customers include small, growing, and established companies in industries such food processing, steel mills, oil and gas, pulp and paper, meat processing and textiles.
Alarm Control Panel
It is widely used in industries and highly guarded places like government offices and expensive private properties. The product is available for use in different forms depending on the nature of engagement.
Household Consumption
The company has a wide range of products for domestic consumption. As such, it has a wide customer base for its products. Some of its most popular products include Alarm Signals and fire extinguishers.
Marketing Mix
Product, Price, Place and Promotion (4 PS)
The success of any business is dependent on two factors, its position, and the attractiveness of the industry it has ventured. Companies operating in industries considered below average may make significant profits because of their position within those industries.
Optimal positioning results in high profits. Taking advantage of the two mentioned factors, positioning and industry selection, requires careful selection, analysis, and leveraging of strengths. In this case, the company will adopt cost leadership and differentiation strategies discussed above.
Products
The company specializes on six product lines. This diversification is important for it spreads risk and earnings. To increase its earnings further, all products lines will be allocated funds for promotion and development. The six main products are listed below.
- Fire Detectors
- Gas Sensors
- Alarm Control Panels
- Alarm Signals
- Fire Extinguishing
- Eco Safety Solutions
Price
Though the prices charged by SSS may be considered high, the effects of reducing them further could be far reaching. The company has maintained premium prices due to its brand name and reputation that have rendered the effects of price based competition minimal.
With the invasion of its traditional markets by other market giants, the company should consider making its prices as competitive as possible. Lowering prices could increase customer base. Increased customer base translates to high sales and profits for the firm.
Place
Currently, SSS’s main market is USA. However, the company is now planning a major drive to expand its presence globally. The drive to invest in these markets is driven by many factors.
The main drive is the increasing demand for security solutions. Secondly, the untapped markets present the largest population on earth. The big population presents a wide customer base. In this regard, China and the Middle East are its main targets.
Promotion
SSS intends to adopt various promotional strategies that do not involve vast sums of money. The company intends to employ advertising to boost its image and products.
Too much advertising is not recommended since it will only be effective up to certain optimal limit; as such, the company has put measures in place to ensure that an optimal level of advertisement is reached.
In the current financial year, the company intends to spend $ 15,000 on advertisement. The table below shows specific areas of expenditure and expected revenue generated from advertising effects.
Online Advertising
Internet has proven effective lately in advertisement. In fact, according to Yeshin, “the web should not be regarded as a substitute for advertising in traditional media,” instead, the internet should be taken as a primary advertising method due to its wide coverage, cost effectiveness, and efficiency (379).
Use of social media such as FaceBook and Twitter and company website can be of great importance to online advertising. Online advertisement will run for 3 months.
Brochures
“An attractive brochure can be very useful” (Henning 169). Therefore, the company must design and print brochures and distribute them to potential customers to aid selling of company products.
Trade Shows
Trade shows, if well organized, can prove crucial to a company’s success. It is no wonder that Hisrich claimed that, “The importance of trade shows in industrial sales cannot be overstated” (Hisrich 139).
Radio
Radio advertisement has remained of great importance despite the emergence of the internet and Television. More still, the advent of FM radio stations has brought in jest among listeners. The company intends to use three popular radio stations in its advertisements.
SWOT Analysis
Strengths
The company has several strengths that have seen it become the leading producer of solution systems products.
Unique and High Quality Products
The company’s greatest strength comes from its unique and high quality products. The company’s products meet customer requirements and are of great quality. This has ensured repurchases, hence, propelling it to greater heights.
Competent Employees
The company boasts a team of highly qualified employees who have the experience and expertise to produce unrivalled products.
With a highly experienced, skilled, and dedicated team, success is almost guaranteed. The success of any business is highly dependent on its staff. SSS is no exception. Without the goodwill and support of staff, the company could have not achieved what it has done today.
Highly Qualified Management
SSS prides in a highly experienced management team. For any business to grow, competent individuals who can make rational decisions, and come up with innovative ways of increasing the business’ income must lead it. The organization’s top management and advisors are all top-rate managers whose reputation is widely acclaimed.
Good Reputation
The company’s reputation is widely acclaimed. The company’s commitment to excellence and innovation have earned it a name and a reputation. Furthermore, the company has ventured in the international platform to bid for tenders with other international companies with vast wealth and experience, and the result has been satisfying.
This has not only cemented its place as a leader in the US, but has also portrayed it as a company whose standard is internationally recognized. This has resulted in increased customer confidence.
Research and Development
The gradual, but steady growth of SSS has been attributed to continuous research. All SSS’s products undergo continuous assessment to realize excellent performance and ease of use. The company has continued to invest considerable sums of money to further research on security solutions. This has ensured that it has remained at the top of security solutions technological.
Low Operational Costs
The difference between success and failure is the ability of a business to cut the cost of its operations. By producing its own production equipment, SSS has been able to reduce tremendously its production cost, hence increasing its profit margin.
Weaknesses
Despite the strengths that have propelled the company to success, many weaknesses threaten to affect negatively its market position and earnings.
Private Ownership
The company has remained privately owned despite tremendous growth over the years. This has denied public participation in its activities. Considering the advantages of active public participation in a company’s operations, the company is losing a lot.
Provision of Uniform Products
Though the provision of uniform products has made the company stand out, it is also one of its greatest undoing. This is because companies that may desire customized products cannot get them. Customization is a good marketing strategy and the company should consider it.
Regionalization/Localization
For many years, the company has concentrated on its regional market, the United States of America. For a company with a global image like Safety Systems Technology, concentrating in a regional marketing is like preparing to fail. Therefore, the company should diversify its markets to improve its earnings.
Potential Leadership Gap
The company’s management competence and experience could be its undoing. The company has not been keen on hiring new skills and recruiting them to join the management level.
Over the last 10 years, the company has only hired one employee with over 15 years experience in a related field, Julie Molina, as its Director of Customer Care (safetysys.com). For years, it has relied on its old managers. In case of anything or abrupt changes in leadership, transition could be challenging.
Opportunities
Household Products Line
The first open opportunity for the company is in the household consumption line. The company has continued to expand all its markets and product lines.
However, its involvement in producing more household products could prove more profitable. This is because households’ demand for security systems such as alarms has seen a tremendous growth.
New Market
Non-traditional markets like Asia and Africa having shown interest and ability to consume security solution products. In this regard, the company’s market is likely to expand.
Assured Demand
The demand for security both at home and at the work place will always exist as long as men live. The company is thus a going concern. In this regard, efforts should be focused on research and innovation to stay ahead of the pack.
Threats
High Prices
SSS charges low prices. However, these prices are still considerably high for average income families who desire security solutions. To expand its market base, the company should consider reducing its prices further.
Up Against Established Competitors
By venturing into the international market, the company “announced” its existence to market giants such as Draeger, RAE Systems, and Detector Electronics Corporation. These established companies have the experience, wealth, and work force to frustrate its operations.
Economic Depression
Economic downturns affect the company both directly and indirectly. It affects the firm directly by increasing operational costs and making access to finance hard; indirectly by affecting its clients’ buying capacity.
Product Offering
The company’s products are undeniably unique and innovative. Systems Solutions Technology has been able to identify market needs and to develop products to satisfy those needs.
As a result, it has been able to cut comfortably above many of its competitors. In fact, some of its products can stand as market leaders even on the international platform.
Works Cited
Association of Fire Chiefs International. Fire inspector: principles and practice. Burlington, MA: Jones & Bartlett Learning, 2012. Print.
Henning, Ronelle. Effective guest house management. 3rd ed. Cape Town: Juta, 2007. Print.
Hisrich, Robert D. Marketing. 2nd ed. Hauppauge, N.Y.: Barron’s, 2000. Print.
Safetysys.com. “Fire and Gas Detection Systems.” Flame Detectors & Gas Detectors From SafetySys, Call 949-583-1857. n.p., n.d. Web.
Yeshin, Tony. Advertising. London: Thomson Learning, 2006. Print.