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Case Study: Atlantic Computer

Autor:   •  July 23, 2017  •  Case Study  •  1,235 Words (5 Pages)  •  593 Views

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Case Study : Atlantic Computer

  1. Executive Summary:

Atlantic Computer is a big manufacturer of servers and high-tech products. It is a market leader in traditional market by providing premier high-end server. Atlantic Computer forecasts a strong growth in basic server market and plans to enter this segment. Atlantic Computer has developed a basic server Tronn and spent huge investment on developing a software PESA which can maximize the server performance up to four times. Atlantic Computer’s main competitor in this basic segment market is Ontario, who has 50% market share with its product Zink. Jowers is responsible for proposing a new pricing strategy for selling Tronn server bundled with PESA before SME trade show.

We recommend to use Value-in-Use pricing strategy for selling basic server by bundling PESA together. After deep analysis by comparing four different pricing options, we found that Value-in-Use strategy is:

  • Atlantic Computer will have high profit and quick breakeven point at year 2001
  • Cheaper price than competitor’s product by having the equal performance
  • Provide customer-oriented solution
  • Gain customer loyalty due to customer’s less operational cost
  • Share the cost with customers which will help to easily convince the customer

  1. What price should Jowers charge DayTraderJournal.Com for the Atlantic bundle (i.e., Tronn Servers + PESA software tool)?

Let’s look at the projected market volumes of basic segment for the next three years. We forecast 5% compound annual sales increase, and 50% attach rate of PESA (half of all the basic servers sold are bundled with PESA):

Basic Segment

Year

2001

2002

2003

Total

Market Demand (unit)

50,000

70,000

92,000

212,000

Atlantic Market Share (%)

4%

9%

14%

10%

Atlantic Sales (unit)

2,000

6,300

12,880

21,180

Atlantic Sales bundle PESA

1,000

3,150

6,440

10,590

Cost of PESA R&D

2,000,000

...

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