Creative Technology in Strategic Marketing Management - Term Paper Example

Strategic Marketing Management Introduction Back in 1981 Creative Technology was launched by Sim Wong Hoo in Singapore who is presently the chairperson and the CEO. The company had humble origins since Sim it was using his personal savings of $10, 000 in a shop that was located in the Pearl centre. When he started the company, he rolled out a five-year program that would see the entity to its success. Initially the shop was meant for repairing computers and later the founder came up with an add-on service to computers that were designed by Apple. Additionally, he personalised PCs that had been manufactured in China. Asides from modifying PCs, the company also developed the audio feature on these PCs that allowed melodies and speech to be played (Baldauf and Stair, 2010:74). Since its inception, the entity has achieved various milestones with the most remarkable one being the Sound Blaster audio cards. The entity has been through difficulties and has always emerged at the top. This paper gives a detailed analysis of Creative Technology and its strategic marketing management. Factors that Resulted to the Success of Creative Technology The major factor that has contributed to the entity’s success over the years is Sim’s effective leadership. Sim is a born entrepreneur who comes up with creative ideas that have enabled the entity to remain afloat over time. He had a vision for his company and laid down quantifiable goals that saw the company increased profitability over the years (Koh, 2008:147). Sim was not only visionary but was a strategic decision-maker and highly effective in solving problems that came up in the company’s operations. The second aspect that has contributed to the company’s success is diversity in their products. It can be observed that technology is dynamic and in order to maintain its customers, the entity has always been conducting modifications on their products in the trendiest and latest designs. This can be observed on various occasions. For example, the company was in the lead in the sound card trade in the past twenty years and was struggling owing to the lack of new and inventive products. This explains why Creative Technology ventured into producing a wide array of products including high-end speakers, DVD players and graphic cards. This was followed by the launch of the Sound Blaster and the Cubic CT (Schaar and Chou, 2009:38). Later in 1998 the company entered into the digital segment of the entertainment industry by launching the Sound Blaster Live! That was enjoyed immense success and placed the company at a competitive advantage over its rivals including Philips and Sony. The company also launched the Blaster PC that had all the award-winning aspects of the company. Lessons Learnt by Creative Technology from CD-ROM Venture From the case study it is clear that the company invested in the CD-ROM venture after its shares were listed in the stock market. This is owing to the mounting pressure from the investors for the company to grow and increase its profitability. The CD-ROM market is highly competitive and the entity started to move away from their focus. In 1995, the company had spawn out of control and had various goals and objectives. At the beginning 1996, there was excess supply of CD-ROMs hence their prices reduced significantly. Initially, a unit was being sold at $80 but following the increased supply the product was being sold $18. Massive losses were experienced in the industry and it estimated that the company lost nearly $100 millions on the venture. In the financial year 1996, Creative Technology lost $38 million as this meant that Sound Blaster was still a profitable venture (Baldauf and Stair, 2010:68). Furthermore, the company’s stock reduced to $5. 05 in 1996 and this was widely to be the end of Creative Technology. In a period of less than 2 years, the company’s net worth dropped by approximately $500 million (Shelly and Vermaat, 2009:67). This was one of the most important lessons that the entity has learnt since its inception. This was one of the major that had a negative impact on the company for several years and adversely affected the stock price as well. It can be concluded that the valuable lesson that was learnt is that the CD-ROM venture was bound to fail. In my opinion this loss cannot be prevented in various ways. The entity should have avoided the mounting pressure from the shareholders. Specialisation could have been one of the best ways to avoid such an event (Shelly and Vermaat, 2009:17). Owing to the fact that sound card business was doing well, the entity should have continued investing in it and come up with ways of being the market leader in this sector. This is because the lessons learnt in the sound card business would not be applicable in the CD-ROM sector. The entity should have simply stuck to the basics and concentrated on its stronghold that was audio. It can be observed that the entity came up with ways to recover from the billion-dollar loss by going back to its initial mission and area of specialisation. Evaluation of the Personal Digital Entertainment Strategy and Internet Strategy The personal digital entertainment entailed the introduction of the Sound Blaster Live! This was the first move into the personal digital entertainment sector. The entity was ready to venture into the consumer electronics entertainment sector. Its main aim was to produce goods that were aimed at facilitating the experience of the multimedia users. The entity wants to concentrate on enhancing the experience of members of the family with the provision of a personalised digital entertainment strategy. This strategy got positive reviews from the members of the public and helped the entity gain a competitive advantage over its major rivals such as Philips and Sony. This move resulted into the introduction of a new line of products and outsmarted its competitors through greater ability and flexibility. The Blaster PC that was introduced in 1998 won various awards for the entity as the users could enjoy mind-blowing cinema quality, audio quality and 3D games. This strategy enabled the use of the internet through the ATM card and the ASDL modem. However, it can be observed that the entity continued to focus on the audio sector and this was applicable to the different forms of entertainment ranging from games, music and movies. Additionally, the entity was vertically integrated and other additional features were made in collaboration with its partners. The new products that were produced were influenced by a solid software application. The entity rolled out its products over a period of time. Secondly, the Creative internet strategy was aimed at informing individuals of the value of their business. This is because most individuals largely viewed Creative Technology as being a hard ware company (Koh, 2008:55). The Creative.Com concept was the new plan that was aimed at transforming the internet based business in the entity. The business units in the entity operated under one website. Its conventional hardware business would continue making its high-margin technologies and it had a well-established customer base. Their low margin goods were produced in large volumes and they were instituted in major corporate projects. The third stage was the hifi.com that was a highly developed website that aimed at linking the business to its consumers. This site was used in the sale products that were being sold by their major competitors. The final stage was the inside.com that facilitated the market for new consumers for their hardware. The last stage is the Venture Capital Group that was established for investments in internet-based companies. An Appropriate Competition Strategy that Creative Technology should follow The suitable competition strategy that Creative Technology has adopted is the use of social media in their marketing strategy. It has been observed that social media is an effective strategy that should be adopted by savvy businesses such as Creative Technology to improve their success and profitability (Swartout et al., 2006:27). The entity is advised to come up with a niche that enables it to stand out against its competitors in the market. The use of social media will help the company to reach its message to a higher number of consumers. The entity should use business accounts including Twitter, LinkedIn, Facebook to pass its message to potential customers and employees. Social media is also an efficient way of facilitating sales and loyalty incentives. The use of social media establishes an avenue where the company to constantly communicate with its customers. This strategy will help the entity to attract the appropriate people since it can present itself as a friendly work environment that is competitive and allows employees to develop their skills and talent (Swartout et al., 2006:13). Finally, use of social media allows the entity to resolve any issues that may have a negative impact on the company’s reputation. This makes it easier for the entity to deal with complaints. To sum up, the company has overcome various hurdles to get to its present success. It can be observed that the company’s leadership and creativity has ensured its survival over the years. Creative Technology is obviously a market leader is the world of technology and should adopt the use of social media to gain a competitive advantage over its rivals. References Baldauf, K. & Stair, R. (2010) Succeeding with technology, Cengage Learning. Koh, J. (2008) Creative technology: creating a niche in accessories, UOB Kay Hian Research Pte Limited. Schaar, M. & Chou, A.P. (2011) Multimedia over IP and wireless networks: compression, networking, and systems, Academic Press. Shelly, G, & Vermaat, M. (2009) Discovering computers 2010: living in a digital world, Introductory, Cengage Learning. Swartout, W., Hill, R., Gratch, J., Johnson, W.L., Kyriakakis, C., LaBore, C. & Moore, B. (2006) Toward the holodeck: Integrating graphics, sound, character and story, University Of Southern California Marina Del Rey Ca Inst For Creative Technologies. Read More