Chiyeyeye enterprise ltd: Hold the phone Chiyeyeye had created thriving business selling software for personal digital assistants and had captured 50 per cent of market share in its industry. Most Vice Presidents of sales would be thrilled at that accomplishment, Kabeshi was not. Fewer people were buying PDAs, and for Chiyeyeye, the trend became a harsh reality with a single call. Kabeshi was talking to a senior buyer for Best Buy, chiyeyeye’s biggest retail partner. The best buy executive was calling to warn Kabeshi that over the next few months Best Buy was planning to radically decrease orders for both PDs and associated software titles. “I got a sinking feeling in my stomach” Kabeshi says. As difficult as it was to hear, the news was not completely unexpected. Research firms had been reporting on the “maturity” PDA market for some time, saying that the devices soon would be obsolete, replaced by so-called small cell phones capable of both data and voice services. Revenue at Chiyeyeye had grown to ZMW 20 million as their popular titles enabled PDA users to play scrabble or consult the Oxford American dictionary. With only 20 employees in three offices, the company had become the dominant player in the market for PDA applications and enjoyed high-profile shelf space in retail chains such as Shoprite and Picknbuy. That dominant market share would be meaningless if PDAs wound up in the technology junk heap, and there were indications they may be there soon. In just one year, the world-wide PDA market had dipped 4.6 %, according to the Garner Group, compared with an 18 % jump for mobile voice-and-data handsets. If Chiyeyeye was to survive, the company would have to quickly break into market for mobile phone application. With that in mind, the CEO Komfwe Mumba convened a series of emergency “wireless summits” to address the issue. The company’s executive gathered every month in the executive lounge at the airport, a point roughly equidistant from Chiyeyeye office and attempted to map a strategy for breaking into cell phone market. The barriers to entry were high, and Chiyeyeye had not established business relationships with mobile network operators. These entitled acted as the guardians of the menus or “decks” from which most mobile phone applications such as ring tones and games, are downloaded and purchased. Chiyeyeye did have longstanding ties with some of the country’s largest retailers, but relatively few customers were publishing phone applications at these brick-and-mortar stores. The challenge was to convince customers to alter their purchasing behaviour. Kabeshi spoke with several retailers and knew that they were eager to begin carrying an all-inone software and hardware bundle geared to neophyte smart phones users. It was, as Kabeshi said, a “dream product”. Not everyone at Chiyeyeye agreed, however. Chiyeyeye’s engineers balked at the notion, and there were also many operational ramifications. Entering this market would require Chiyeyeye to provide expensive 24/7 customer support services. In addition, the competition from larger and healthier companies such as Microsoft and sony would be tough. The executives moved on to the other options. Section A: Answer both questions Q1. a) What steps did Chiyeyeye take to scan the market and the threats that were present to avoid becoming obsolete? b) How can a technology-based company like Chiyeyeye keep up with rapidly changing markets, products, and competitors? What type of entrepreneurship is this? Explain c) Which is more important to Chiyeyeye to success: strategy or resources? Suppose your explanation with relevant facts d) How does the mission statement for entrepreneurs like Komfwe Mumba influence their view of an industry and their companies’ place in it?
Chiyeyeye enterprise ltd: Hold the phone
Chiyeyeye had created thriving business selling software for personal digital assistants and had
captured 50 per cent of market share in its industry. Most Vice Presidents of sales would be
thrilled at that accomplishment, Kabeshi was not. Fewer people were buying PDAs, and for
Chiyeyeye, the trend became a harsh reality with a single call. Kabeshi was talking to a senior
buyer for Best Buy, chiyeyeye’s biggest retail partner. The best buy executive was calling to
warn Kabeshi that over the next few months Best Buy was planning to radically decrease orders
for both PDs and associated software titles. “I got a sinking feeling in my stomach” Kabeshi
says.
As difficult as it was to hear, the news was not completely unexpected. Research firms had
been reporting on the “maturity” PDA market for some time, saying that the devices soon
would be obsolete, replaced by so-called small cell phones capable of both data and voice
services. Revenue at Chiyeyeye had grown to ZMW 20 million as their popular titles enabled
PDA users to play scrabble or consult the Oxford American dictionary. With only 20
employees in three offices, the company had become the dominant player in the market for
PDA applications and enjoyed high-profile shelf space in retail chains such as Shoprite and
Picknbuy.
That dominant market share would be meaningless if PDAs wound up in the technology junk
heap, and there were indications they may be there soon. In just one year, the world-wide PDA
market had dipped 4.6 %, according to the Garner Group, compared with an 18 % jump for
mobile voice-and-data handsets. If Chiyeyeye was to survive, the company would have to
quickly break into market for mobile phone application.
With that in mind, the CEO Komfwe Mumba convened a series of emergency “wireless
summits” to address the issue. The company’s executive gathered every month in the executive
lounge at the airport, a point roughly equidistant from Chiyeyeye office and attempted to map
a strategy for breaking into cell phone market. The barriers to entry were high, and Chiyeyeye
had not established business relationships with mobile network operators. These entitled acted
as the guardians of the menus or “decks” from which most mobile phone applications such as
ring tones and games, are downloaded and purchased. Chiyeyeye did have longstanding ties
with some of the country’s largest retailers, but relatively few customers were publishing phone
applications at these brick-and-mortar stores. The challenge was to convince customers to alter
their purchasing behaviour.
Kabeshi spoke with several retailers and knew that they were eager to begin carrying an all-inone software and hardware bundle geared to neophyte smart phones users. It was, as Kabeshi
said, a “dream product”. Not everyone at Chiyeyeye agreed, however. Chiyeyeye’s engineers
balked at the notion, and there were also many operational ramifications. Entering this market
would require Chiyeyeye to provide expensive 24/7 customer support services. In addition, the
competition from larger and healthier companies such as Microsoft and sony would be tough.
The executives moved on to the other options.
Section A: Answer both questions
Q1.
a) What steps did Chiyeyeye take to scan the market and the threats that were present to
avoid becoming obsolete?
b) How can a technology-based company like Chiyeyeye keep up with rapidly changing
markets, products, and competitors? What type of entrepreneurship is this? Explain
c) Which is more important to Chiyeyeye to success: strategy or resources? Suppose your
explanation with relevant facts
d) How does the mission statement for entrepreneurs like Komfwe Mumba influence their
view of an industry and their companies’ place in it?
Step by step
Solved in 3 steps
