Caso TerraCog Harvard

Case Summary: “TerraCog Global Positioning Systems: conflict and

communication in the aerial proyect”

TerraCog Inc.

TerraCog was a company founded in 1977 that didn't trade in the market stock. The

main products of TerraCog were: global positioning systems (GPS) and fishing sonars.

Even though the company wasnʼt always the first to introduce new products, TerraCog

didn't have problem to capture market because their products were of high quality and

addressed customer needs.

The Problem

Currently (in the case) the company was losing market because his competitor

(Posthaste) introduced a new GPS called BirdsI. This GPS had a value added because

it was possible to see satellite images; the pictures weren't live (were static pics that

were taken from a satellite). In the begining TerraCog didn't care about the new product

of Posthaste because they thought that it was a fad and that Posthaste hadn't done a

great improvement in terms of development compared with the maps installed in the

TerraCog GPS.

Finishing the 2006, the sales of BirdsI had been amazing, for that reason the TerraCogʼs

sales team started to press to develop a new GPS similar to Posthaste. As TerraCog

had delayed to create a new product, the company decided to create the new product

within a existing platform. Pitifully, the redesign process increased the cost of production

too much, which generated a discussion among company managers. The sales team

headed by Ed Pryor said the new product Aerial should be priced below $425 to capture

the lost market share. The sales team also said that with those production costs the

price of sale must be minimum $475 per unit, but that with this price, the company

wasn't going to be competitive because his competitor had a lower price.

Emma Richardson was a Executive Vice President newly promoted, she was

responsible for the group and was in a dilemma; she needs to create a synergy and

dicides the best for the company.

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