Growing for Broke

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Recommendations:

Based on the matrix above, it shows that the most advisable option that Nikolas can do is to go forth with the acquisition of MonitoRobotics. This will further enhance the quality of the add-on service and allow the company to find its place in the global competing market.

The strategy is to grow the company by focusing on the expansion the company’s services division. The company can transform from a manufacturing company into a high-tech company, which come with the promise of growth in sales and profit. The first tactic is to acquire MonitoRobotics. After that, the company should launch a new product by adapting the sensor technology from MonitorRobotics for use on the machine tools in Paragon Tool. They will be able to offer rapid-response troubleshooting service on their products. At the same time, they should increase the market budget in order to reach the mass market and gain people’s attentions in this new service. Last but not least, the company should continue to do research on development of the products and focus on the best ways to deliver its products and services to end customers.

Implementation Issues:

Obviously, there will be issues regarding the initial cost associated with the acquisition and some significant expense in the near term, including accelerated software research, hiring and training, and even brand development. However, the service market has significant potential. Adopting new ways of providing effective customer service assistance will eventually help robust the company’s sales and profit. The value it creates will outrun the initial cost.

Impact to Competitive Advantages & expected Competitor responses:

After Paragon Tool acquire MonitorRobotics and introduce the new service, its competitors will probably reduce the prices for their products or create their own service departments to compete in the new market. However, the technology of MonitoRobotics is unique and it is hard for other competitors to imitate. They will find it difficult to keep up with the pace of Paragon Tool, so they would not likely provide that much threat for concern. Ultimately, Paragon Tools should still continue to invest in new products or look out for new technology in order to strengthen its competitive advantage in the market.