The MathSoft CEO, David Blohm, is at a crossroads. He has a good product that has two strong potential target markets B mathematicians/engineers and scientists. The product is a spreadsheet application that allows for great flexibility in problem solving and forecasting. The product is facing great competition and pricing wars, and Blohm is running out of marketing money. His is a company in great need of strategic choice and analysis, since it has erred on the side of trying to be Aall things to all people.@
One look at MathSoft=s selected financials suggests part of the problem. With limited marketing funds, Blohm=s team is trying to stretch the marketing dollars too thin, a situation complicated by the fact that there are few crossover possibilities in much of his marketing and sales efforts. The first step he must take is to carefully analyze the business potential of his two main target markets. This analysis should be a Awhat is@ instead of a Awhat if.@
If one were to look at simply the potential numbers in each of the potential MathCad and MathStation users (Exhibit A), it would seem that, in raw numbers, there is greater opportunity in the MathStation users. However, because of the nature of that market, it could be harder to penetrate.
The analysis that Blohm should do would deal with the following questions.
How effective is my software in solving the problems of the two target groups?
How much competition is there currently?
How much competition is on the horizon?
In fact, much of the pre analysis that Blohm and his people should do could effectively take the form of a SWOT analysis for both MathCad and MathStation. Such an analysis would give a clear picture of each products Strengths, Weaknesses, Opportunities and Threats.
Once the SWOT analysis is complete the focus would be clear which of the two paths to follow. This is not to say it is an Aeither/or@ but