Computervision Japan

Group 5 Rohit Nath

Gaurav Patange Mangesh Patil Mahtaab Kajla Sachin Kumar

Situation Analysis

CV had given exclusive distribution rights to TEL to market its CAD/CAM products in Japan

CV used direct sales alternative in US and European

TEL had excellent relationships with CV’s customers in Japan and therefore was valuable ally to CV

TEL’s performance in handling CV’s product line was declining mainly because of lack of enough dedicated manpower

•Exclusive distribution contract with TEL not renewed

•Resources allocation preference to TEL’s other JVs

Current channel performance was declining drastically and needed rethink of distribution strategy to achieve the target of 30% market share in 3 years

Problem Statement

Strategy to migrate from declining to growing distribution channel keeping in mind the organization capabilities and existing collaborations thereby achieving the target of 30% market share in Japan in 3 years

Evaluation of Alternatives

Build own Direct Sales Network

Pros

Very effective as proved by competition and in other markets

Cons

High administrative expenses

Difficult for US companies to hire Japanese nationals

High implementation time

CV will break its long-established relationship with TEL

Joint venture with TEL

Pros

Strengthening of relationship between CV and TEL

Expansion of salesforce by TEL

Local knowhow of market

Cons

Predominant Japanese partner will have major control

Senior Management of CV against the option – high internal conflict

Evaluation of Alternatives

Take over servicing and support activities from TEL

Pros

Better sales coverage by redeploying sales force of TEL

TEL can focus fully on sales

Cons

TEL not ready to transfer its own resources

Additional cost for CV

Service quality may degrade since servicing is not CV’s core competency

Multiple distribution arrangements with Toyota and Sony

Pros

Established credible channel

Distribution network of different companies can be used for maximum benefit

Good for acquiring new customers from large industry groups

Cons

Obstruct relationship with TEL

Additional product training costs for CV

Additional service and support costs for CV

Commission on sales to be shared

Complementary Penetrate •Keep existing channels •Add new channel •Reinforce current capabilities •Low internal resistance •Low channel conflict

Develop •Keep existing channels •Add new channel •Develop new capabilities •Medium internal resistance •Medium channel conflict

Replacement Switch • Exit existing channels • Add new channel • Reinforce current capabilities • Medium internal resistance • High channel conflict

Reinvent • Exit existing channels •Add new channel • Develop new capabilities •High internal resistance •High channel conflict

Enhancing existing Capabilities

Requires new capabilities

Internal Impact

Selection Criteria

Recommendations

Take over service, support and product adaptation activities allowing TEL to focus on sales efforts

• Additional costs compensated by capturing additional market share

• Relationship with TEL is strengthened by renewing distribution rights to TEL as most preferred distributor

Multiple distribution arrangements with Toyota and Sony

• Medium channel conflicts with TEL will be evident but will have to be compensated by strengthening relationship by above recommendation

Modify organization structure to suit above recommendations

Thank You