Resotech – Harvard Business Review Case
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RESOTECH Inc.
The main problem that I see after reading the case is that should RESOTECH enter mobile MRI market or just stick to its original niche – very high-end customers?
The advantages of entering mainly would be:
New market segment
Increased sales
Increased profits
If you we look at the advantages of entering, I would not say there is something special with them, because we basically see Increase in sales and thus in profits. It is obviously good to increase companys profits, but I think there are some more important things to consider while making the decision. It seems like the contract with CHC would be profitable, but are we going to just use this money in order to finance our main competency, which is RS2000 and in general high-end machines? Well if we do so it might seem a good project, because we are bringing money in company when we need it, but this decision, to my mind, should not harm the companys strategy.
If we look at the market, market is very fragmented. Every firm present on the market has a share. This means that every firm has some kind of its competitive advantage, the feature of their product that makes them different from others. Resotechs one of the main comp advantages was their superior quality. So Resotech, it if enters the mobile MRI market, they should put there the product of really superior quality, but as we see in the case there are lots of questions in the production process of mobile MRI. Resotech is not sure if they will be able to produce the product of high quality, meet the deadlines of the contract, etc. Its not about accepting a contract only, its about even if we accept are we able to perform well? Because, if Resotechs mobile MRI machine would not be as good as or better then the competitors it would be a big harm to RS1000 and RS2000, because all those products are in the end associated with Resotech.
My suggestions would be not to accept the contract, because I dont think it is good in any terms. I think Resotech should continue working on RS2000, which will obviously be a success and will bring money in the company and Resotech sees that there is a huge potential on mobile MRI market, we can actually collaborate with other firm or create a merger in order to work on mobile MRI machines only. Anyways, I think we need to keep RS line, high-end line, totally separately from mobile MRI machines – strategically, brand image wise, etc.