California based company Essay Example

R;D spending in order to increase revenue and efficiency. Improving management was the first major step taken towards this goal.

It was discovered that empowering managers to bring in what they deemed important for company growth was crucial. Under HP management, this culture was lacking and needed to be discarded for the company to see results. The new approach now allows anyone to introduce novel ways of doing things, which can be implemented if most decision-makers approve. The old practice of penalizing individuals for proposing innovative ideas and approaches is no longer applicable in the new company.

The paradigm shifted to one where it was imperative for individuals in positions of authority to generate novel ideas and fresh approaches. This was accompanied by a significant reduction in staff numbers and the removal of management hierarchy. In prior times, although managers may have communicated original ideas, their ability to act on them was limited, with no efforts made by superiors to enlighten them on business matters or equip them with up-to-date information. Furthermore, expense accounts were meticulously examined with a view to eliminating unnecessary expenses, including staff cuts at all levels of management.

The research and development expenses of the company were reduced by the new management due to the perceived abundance of unfinished scientific projects. The new strategy aimed to avoid creating bureaucratic projects around ideas that lacked momentum. This change was hoped to improve the company's prospects in its struggle to regain market leadership. If successful, this shift would allow the company to update its outdated culture and catch up in technological advancements necessary for its existing, yet stagnant, terminals. Additionally, the company would need to

focus on educating merchants about the implications of the new strategy for their future relationship with the company. Although it is possible that ineffective marketing played a role in the company's decreasing sales, its products have maintained high quality standards.

VeriFone’s machines are running in at least 10 million out of approximately 20 million point of sale locations. This indicates a share of over 50% for one company that competes with others to retain its market share. The company's focus is on attracting more business through new products, such as the Omni 3700, which offers smart card compliance and multiplication capability in a compact design. The introduction of this "sexy and cool" architecture is expected to appeal to merchants, generate more revenue, and meet high demand for suitable equipment. A winning combination is created by combining vibrant branding, a high level of customer satisfaction, and in-demand equipment.

Solely this turnaround resulted in a 10% increase in margins during the first 100 days of the Gore Groups' leadership. The company achieved a measurable profit margin by implementing efficient measures such as reducing staff and cutting expenses in certain areas. The introduction of efficiency through streamlining expenses and involving the management team in decision-making and setting the company's direction, while discarding an unentrepreneurial culture, enabled VeriFone to surpass its competitors. The company's success can be mainly attributed to its introduction of new technologies and its application used with its equipment. As a result, VeriFone outperformed its major competitors, Hypercom and Ingenico, with reported sales of $101 million compared to Hypercom's $72 million and Ingenico's $65 million.

The recently acquired company credits its success to changing the culture of

cost-cutting and implementing an expense target that did not exceed revenue expectations. This approach led to generating sales revenue that was unattainable with HP's previous methods. Previously, each department created their own budget based on projected sales figures, but this approach often fell short. The new strategy prioritized reducing expenses to maximize profits and increase sales. HP's previous focus was on entering the rapidly growing Internet payment system market, which they failed at due to competition from IBM and Sun Micro Systems.

After failing to meet the target, HP was unsure about the future of the company. It was not feasible for HP to enter the payment processing industry as it lacked a large revenue base. However, VeriFone, a smaller company, found the low revenue base attractive and acquired the company. The Gore Groups now operate it independently.