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Palm Inc. Strategy Research Paper


Current situation

Palm incorporation deals with manufacturing and marketing of handheld or mobile products to individual and institutional customers on a global scale (Alto & Calif, 2010, para. 7). With regard to market the operating system for handheld computers in the US, Palm controls 80% of the total market while Microsoft has a market share of 16%.In addition, the firm has managed to attain a market share of 60% in the hardware market.

Mission and vision

Palm is committed at developing automatic and strong mobile products in an effort to ensure that people are able to deal with their lives more effectively and efficiently (Nemechek, 2009, para. 1). In its operation, Palm Inc. has upheld the belief that the outlook of personal computing is mobile. This increases the firm’s commitment in the provision of powerful computing solutions.

Goals and objectives

In its operation, Palm Inc. is guided by a number of goals and objectives as outlined below.

  • The firm intends to attain the position of a market leader in the handheld devices industry. Palm Inc. intends to achieve this by supplying market defining products. In addition, the firm intends to attain this by manufacturing products which result into a high user experience.
  • To introduce a new and unique perspective in mobile computing market.
  • To expand the firm’s global presence

Major Strengths of Palm Inc that are basis of its goals and objectives

In an effort to achieve its goals, Palm Inc. has integrated the concept of product innovation in its strategic management processes. This has been made possible by the fact that the firm has a strong research and development team. As a result, the firm has a well developed competitive edge with regard to new product development (Rubinstein & Jeffries, 2009, p. 4).

The firm has also incorporated the concept of customer focus in its operation. As a result, the entire firm’s operation right from product design and development are guided by user experience and customer product experience. The firm has been able to undertake effective product customization through its acumen in software development.

In addition, the firm’s objective to introduce unique perspective in mobile computing is also enhanced by the fact that the firm has established a strong alliance with other application providers. As a result, the firm is able to optimize its device platform with regard to new mobile applications especially.

This is mainly so for products involving mapping, Global Positioning Systems (GPS), messaging, music, videos and those requiring high bandwidth(Rubinstein & Jeffries, 2009, p. 5).

Major Weaknesses that are planned for improvement or to compensate

Palm Inc. has not been able to differentiate its Window Mobile effectively by integrating Palm shortcut and user interface so as to improve user experience. In order to improve its competitiveness, it is paramount for the firm to capitalize on this area.

In addition, Palm has not been able to achieve expertise in some areas of its operation. For example, the firm’s management team has not been able to develop a strong coordination between some of its departments especially its marketing and production departments.

For example, in 2001, the firm’s marketing department announced the firm’s intention to launch new handheld m500 and m505. The resultant effect was a decline in demand of the firm’s other products already in the market since the customers anticipated better products (Rubinstein & Jeffries, 2009, p. 14).

Competitive Analysis

In its operation, Palm’s three top competitors include Research in Motion Limited (Rimm), Nokia Corporation and Apple Incorporation.

Rimm deals with production of a wide range of integrated hardware and software. In addition, the firm offers a variety of services which have the capacity of supporting a variety of wireless network standards.

Its major products include RIM wireless handheld, BlackBerry wireless platform, software and hardware development tools. The firm’s software is designed in an effective and efficient way to ensure ease of use (Lion & Green, 2006, p.3).

Rimm’s has attained a higher competitive advantage due to its strategy and unique product offerings. Rimm has incorporated the differentiation strategy as its core generic strategy. This has been achieved through incorporation of strong technology and innovativeness in developing its products.

The firm’s software enables both individual and institutional consumers to integrate other hardware without incurring heavy financial cost (Lion & Green, 2006, p.3). Despite these benefits, the firm’s BlackBerry uses the Network Operating Centre as its relay centre. NOC is considered to be faced by numerous security threats (Lion & Green, 2006, p. 4). In addition, its products are considered to be relatively expensive.

Over the years, Nokia has attained a competitive edge with regard to development of various products and services. Its core products relate to mobile devices, cameras and digital music. Other products which the firm offers include minicomputers and global positioning systems (Nokia, 2007, p.1).

The firm’s software has a capability of supporting various applications such as videos and music. Technology and innovation are the basis of the firm’s differentiation strategy. With regard to technology, the firm emphasizes on;

  • Smart connectivity
  • User experience leadership
  • Provision of preferred innovation platform

As a result the firm is able to attain a high cost advantage in addition to delivering high customer experience. In addition, the firm has been able to incorporate simplicity in the process of differentiating its products (Nokia, 2007, p.1). However, Nokia products are highly priced which limits a large number of consumers from using the firm’s products (Nokia, 2007, p. 3).

Apple Incorporation designs and manufactures various products such as personal computers, smartphones and other computer electronics. In addition, the firm develops computer software. The firm’s core hardware products include iPhone, iPad and iPod. Its software products include iWork, iLife, Mac OS X operating, iOS and Aperture.

The hardware products such as the iPhone, iPad and iPod provide the customers with a higher level of experience. This arises from the fact that they enable a wide range of services such as multimedia services, internet browsing, music and videos (O’Grady, 2008, p. 40).

The firm has incorporated the concept of product differentiation in developing its products. This is attained through effective product designing and innovation. Its software and hardware of effectively designed to ensure that they are of high quality.

The firm’s innovativeness has enabled it to be on the lead with regard to entertainment (Kurtz, MacKenzie & Snow, 2009, p.57). However, a significant proportion of customers consider the firm’s products to be expensive compared to those of the competitors. In addition, the firm’s software has a limited capability of supporting other applications (O’Grady, 2008, p. 45).

In the Smartphone’s industry, Apple Incorporation has a market share of 17% while Rimm has a market share of 15 %( Dignan, 2010, para. 6). Nokia has managed to remain the leader for Smartphone’s industry. The firm has a market share of 38.1% (Chatterjee, 2010, para. 5). The industry is witnessing a rampant transformation arising from increased overlapping between the industry and other electronic devices.

The competition is also being increased by new firms entering the industry and introducing electronic devices with Personal Digital Assistance (PDA) functions or new features. The firm faces stiff competition in the operating systems market from two companies which include Handspring and Sony.

The intensity of the competition arises from the fact that these companies manufacture products which are similar to Palm’s. This poses a threat to the firm’s survival considering the fact that switching cost in the industry is low (Dess, Lumpkin & Eisner, 2007, p.43).

Product lines

In its operation, the firm has incorporated the concept of product diversification in its operation. This is evident in the fact that the firm deals with a wide range of products such as handheld computers, computer software and hardware products and also offering various services and accessories (Rubinstein & Jeffries, 2009, p. 3). Some of its traditional product lines include Zire, Tungsten, Palm Pilot, Palm OS Garnet, Palm III, V and VII.

The firm undertakes continuous product innovation. For example, in 2009, the firm developed another Operating System (OS) known as webOS which was an improvement of Palm OS. Inline with its product diversification, the firm has ventured into production of smartphones such as Pre, Treo, and Centro smartphones.

Competitive strategy

Considering the dynamic nature of the wireless communication industry, Palm’s management team has found it paramount to position itself effectively using a defense mechanism. In order to achieve this, the firm has adopted differentiation as one of its core competitive strategies.

This is achieved through effective designing and integration of the firm’s software, hardware and other services in an effort to deliver a high customer experience (Rubinstein & Jeffries, 2009, p.7). In line with its product differentiation, the firm has also incorporated a broad market scope through product diversification.

Strengths

Over the years of its operation, Palm has been able to develop a good brand identity. The resultant effect is that the firm has managed to attain a strong positive reputation in the market.

According to Yang (2007, p.193), creating a strong brand identity enables a firm to establish a strong relationship with the customers. The firm’s strength also arises from its effectiveness in integrating both the hardware and software which increases ease of use by the customers (Rubinstein & Jeffries, 2009, p. 7).

Major weakness

Over the years, Palm has continuously adopted the judo strategy in its operation. This is evident in that the firm has continuously concentrated on specific skills. This presents a major weakness for the firm since competitors can exploit on the particular skill. This means that the strategy will not contribute towards the firm’s long-term advantages (Yoffie & Kwak, 2001, p. 96).

Opportunities

Considering the growing demand of handheld computing capabilities, firms in this industry are continuously formulating models aimed at satisfying the demand. One of the models being considered is formation of alliances (Rubinstein & Jeffries, 2009, p. 2).

This presents an opportunity for the firm to expand its market operations by forming strategic alliances. The resultant effect is that the firm will increase its competitive edge.

Threats

Palm’s major threat is increase in the degree of rivalry as a result of increase in the intensity of competition (Rubinstein & Jeffries, 2009, p. 9). The firm expects intense competition from existing firms and new entrants. Both the existing firms and the entrants are continuously conducting product innovation through integration of new features in the handheld computing devices.

General Environmental Analysis

Opportunities

The handheld devices industry is undergoing rapid changes (Rubinstein & Jeffries, 2009, p. 3). As a result, no company has been able to establish a stable ground in its operation. This presents an opportunity for the firm to develop its competitiveness through product innovation.

The industry is also characterized by a highly segmented customer base which means that their needs are different. This presents an opportunity for Palm to establish its competiveness through product differentiation. With regard to technology, manufacturers are not clear on their product need which gives firms in this industry an upper hand in shaping the industry through new product development.

Threats

The firm’s commitment in product innovation may be affected by economic crisis. This arises from poor performance in terms of sales due to a decline in consumer purchasing power. During financial crisis, financial institutions reduce their lending capacity (Rubinstein & Jeffries, 2009, p. 23).

This means that the firm will not be able to secure a bank loan. The resultant effect is that the firm will experience financial constraints and hence its inability to undertake effective research and development.

Recommendation

In developing a strategy, the firm’s core objective is to develop and sustain a higher competitive advantage. Currently, most of the firms in the wireless communication industry are considering the most effective way to survive in the industry.

This arises from the dynamic nature of industry due to growth of technology. In addition, firms in the industry are increasingly investing in research and development. The core objective is to develop a product which results into maximum customer experience.

Considering the dynamic nature of the wireless communication industry, it is paramount for Palm Inc. to change its status quo. This arises from the fact that it will be challenging for the firm to sustain its current competitive advantage on its own.

One of the ways through which the firm can implement this is by forming a strategic alliance with a potential partner. This will increase the firm’s ability to develop products which results into higher customer experience.

Reference List

Alto, P. & Calif, S. (2010). HP to acquire Palm for $ 1.2 billion. Web.

Chatterjee, S., (2010). IDC: Nokia, RIM controls Smartphone despite dip. Web.

Dess, G., Lumpkin, G. & Eisner, A. (2007) Strategic Management (3rd Ed.). Boston: McGraw-Hill Irwin.

Dignan, L. (2010). . Web.

Kurtz, D., MacKenzie, H.F & Snow, K. (2009). Contemporary marketing. London: Cengage Learning.

Lion, E. & Green, J. (2006). RIM in the mobile enterprise market. Web.

Nemechek, A. (2009). About Palm Inc: Mobile products for extraordinary lives. Web.

Nokia. (2007). Nokia technology strategy. Web.

O’Grady, J. (2008). Apple Inc. New York: ABC-CLIO.

Rubinstein, J. & Jeffries, D. (2009). Palm Inc. Washington: United States Securities and Exchange Commission.

Yang, K. (2007). Design for six sigma for service. New Jersey: Butterworth Heinemann. Yoffie, D. & Kwak, M. (2001). Mastering Strategic Movement at Palm. MIT Sloan Management Review, 43-1, 55-63.

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