Resotech Inc. Essay Example

launch their products (staying out of the market is no option since it’s the company’s only product).

This brings us to the question of available resources. How many resources you have to invest to be the first mainly depends on how many resources your competitor’s are investing. Moreover, if they suddenly increase their investments trying to outpace you, you should be able to react. What does that mean for Resotech Inc.? The company is known for its amazing quality. The products are of superior technology and benefit from a “Rolls-Royce” image. This implies that a lot of time must be spent on R&D for developing a mobile scanner of such a quality.

Delivery delays are possible, or even probable, as it were the case for the RS-1000. Moreover, the development might also lead to a delay of the RS-2000 due to limited R&D resources. And what if the competitors enter the market as well? One can argue that Resotech might be able to discourage other companies to enter the mobile market once they committed themselves. However, this is unlikely for two reasons: First, Resotech is a relatively small company. Larger companies such as GE, Siemens, and Picker will probably have a shorter product development cycles due to their huge financial reserves and experience.

Second, Resotech aims for high quality products. Competitors are able to produce less advanced scanners and enter the market first. In contrast, this is no option for Resotech. Moreover, Resotech would have to acquire new personnel first. To summarize, Resotech could sell 25 units. However, there’s a risk that Resotech is not able to stick to its delivery schedule,

since the development of a mobile product is “not a piece of cake”. This may result in penalties. Additionally, if we try to stick to the schedule with a less advanced product, we will damage our image as quality leader.

Moreover, what if 25 units are not enough to break even and another competitor has already entered the market? If Resotech accepts the offer, it won’t have any spare resources to accelerate R&D to outpace potential entrants. On top of that, we put the RS-2000 at a risk of being launched too late, since we might face a shortage of R&D capacity for both products. Therefore, from a time point of view, I recommend to decline the offer. Thereby we can focus on the RS-2000 and launch it earlier. Declining would be less risky, but maybe less profitable. It’s the safe way.