Discuss the strategic management process that JRP Computing can implement in achieving above average returns.
Discuss the strategic management process that JRP Computing can implement in achieving above average returns.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Discuss the strategic management process that JRP Computing can implement in achieving above average returns.
Transcribed Image Text:Case Study: JRP Computing Bhd
JRP Computing Bhd (JRP) is a leading provider of Enterprise Integration Software
(EIS). EIS allows a firm to connect and integrate processes across all aspects. To fuel
its dramatic growth, JRP has focused its organization entirely on product development
(software programming for a suite of EIA products) and selling (making the sale and
then moving into a new target) while outsourcing the installation and consulting
aspects to the world largest accounting firms. This also makes JRP basically a product
company whereas most competitors like Oracle and PeopleSoft, in its market space
operate as solutions companies. One benefit of this focused strategy is JRP's product
is generally recognized as 200% to 300% better than competitors' software, and thus
adaptors are likely to have a one-to two-years advantage.
In further contrast to the competition, JRP has used its partnership with the accounting
firms to deliver a turn-key solution (It is a type of system built end-to-end for a customer
that can be easily implemented into a current business process). and has focused this
solution on a market comprised of the world's largest, global manufacturer and
consumer product companies. The accounting firms, in tum coordinated a
comprehensive collection of hardware, operating systems and complementary
software firms. Installation and related consulting for ElS typically cost between
RM100 to RM200 million but with the JRP software component accounting for only
about 20% of the installed cost (the remaining 80% is spent on the actual installation,
not counting the value of consumer's time). To incentivize the accounting firms to help
sell its product (since, at least initially, the accounting firms had better reputation and
controlled access to the target consumers). JRP has told its partners that it will never
enter the installation and consulting side of the business (aside from installation and
consulting that JRP does as part of its software support). By dangling such a large
carrot in front of the accounting fims provided the continuing benefit of encouraging
their continued support to JRP with their customers.
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