Bradley’s Reprocessed Technology is a new Value Added Reseller (VAR). The company’s mission is focused on marketing specialty inventory software products to over 1,200 VARs that sell in vertical markets. Each market is distinct and serves a particular specialty industry. In addition to the software, Bradley will sell the inventory data collection hardware that will operate the software. Customarily, VARs who sell to these vertical markets focus solely on the industry's distinctive product line or service. Though their customers have inventory controls needs, these VARs have not had a product they could offer until now. Critical to the product's success is the ability to sell the customer an inventory management solution that costs less than $5,000. Bradley’s Reprocessed Technology has signed a strategic alliance agreement with Waverly Engineering to sell its software products through these VARs.
The first product is Waverly Inventory Basic and will be released in May. Bradley’s Reprocessed Technology projects sales of 20,000 units in 36 months. The product will sell for $850. Even though the company is focused on the vertical markets, VARs who sell warehouse are also interested in a low-end data collection solution. Crest Systems will assemble 1,000 plus warehouse management VARs to sell Waverly Inventory Basic. Bradley Reprocessed Technology will also develop specialty software modules that can be integrated within Waverly Inventory Basic software. These units will sell for $800 to $1,000. Bradley’s Reprocessed Technology plans to create a strong business relationship with its VARs customers that will lead to providing additional software and hardware products. Company Background
Bradley’s Reprocessed Technology is a Value Added Reseller (VAR) that is focused on selling low-end inventory software and hardware products. The company markets Waverly Engineering software products to over 1,200 VARs that sell products in vertical markets. Also, Bradley’s Reprocessed Technology will market the software product to warehouse systems VARs who are looking for a low-end inventory software product. Leroy Bradley is the owner of Bradley’s Reprocessed Technology. The company will be set up as a Limited Liability Corporation (LLC). It is expected that this form of incorporation will allow room for growth and be an effective vehicle for acquiring a capital in five to seven yea The start-up cost of Bradley’s Reprocessed Technology will consist primarily establishing an account receivable system and communication system for salespeople. Leroy Bradley will invest $50,000. He will also secure a $100,000 loan. Marketing Plan
There are thousands of small businesses that are dissatisfied with the choice of inventory control products that are available to them. Most of these businesses exist below the water line for software companies. Selling to a market that can only spend $5,000 on an inventory control solution is considered too small a return for the sales activity. It is Bradley’s Reprocessed Technology plan to sell to the VARs that serve the vertical markets as well as the VARs that sell warehouse products and services. Bradley’s Reprocessed Technology will also sell the hardware directly to customers when the software is purchased by the vertical VARs' customer. The company will use this opportunity to establish purchasing relationships with businesses with growing inventories. Bradley’s Reprocessed Technology will focus on two target market groups: Warehouse Products and Services VARs: These VARs offer warehouse management hardware and software. Though their primary focus is on larger contracts, an inexpensive product focused on the low end of the market will be attractive if the payoff is large enough.
The VARs retain $500 on each product sold. There is no other software product that is focused on our target customers that rewards better for the sale. Vertical Market VARs: These VARs traditional don't sell inventory management products to their customers. Inventory control products are not their focus; rather it is whatever item or product particular to that industry that is used in manufacturing or assembly of their final product. Yet they have thousands of customers. If the payoff is large enough, their access to the market would lead to enormous sales. Like the warehouse product VARs, the vertical market VARs would retain $500 on each product sold. Bradley’s Reprocessed Technology has the ability to create specialized software modules for customers that will customize the software. The company believes that one fourth of all software customers will request a customized module to be added to the software after purchase. This competitive method will be very effective and far reaching. It has the potential to go forth in many foreign markets such as China and Japan.
Both of these markets produce much of the technology that we have today, so having the option of refurbishing outdated software and hardware will be in high demand at a lower cost to the consumer in foreign markets. Recent changes in the computer reseller market have adversely affected AMT. These include margin squeezes, longer collection periods, and lower inventory turnovers. All of these concerns are part of the general trend affecting computer resellers. The margin squeeze is happening throughout the computer industry worldwide. SWOT Analysis
The only way we can hope to differentiate well is to define the vision of the company to be an information technology ally to our clients. We will not be able to compete in any effective way with the larger chain retailer. We need to offer a real alliance that includes such intangibles as confidence, reliability, and knowing that somebody will be there to answer questions and help at the important times. Our support services will be a major strength, which we hope to capture market share will include such services as; training, upgrade offers, installation services, network configuration services, etc. The company will seek to aggressively pursue new opportunities.
There are several different kinds of computer retailers within the industry including:
1. Computer dealers: often focused on a few main brands of hardware, usually offering only a minimum of software, and variable amounts of service and support. Their service and support is not usually very good and their prices are usually higher than the larger stores.
2. Chain stores and computer superstores: usually offer decent walk-in service, with very aggressive pricing, and little support.
3. Mail order: offer aggressive pricing of boxed product. For the purely price-driven buyer, who buys boxes and expects no service, these are very good options. None of these direct competitors provides the customization and service that small businesses such as our clients truly need. We need to effectively compete against the idea that businesses should buy technology and that they don't need ongoing service, support, and training.
Our focus group sessions indicated that our target home office markets think about price but would buy based on quality service if the offering were properly presented. They think about price because that's all they ever see. We have very good indications that many would rather pay more for a relationship with a long-term merchant providing back-up and quality service and support; they end up in the box-pusher channels because they aren't aware of the alternatives. Arizona Learning System uses a technology strategy similar to Bradley’s Reprocessed Technology. The Arizona Learning System plan envisions developing two “markets: A telecommunications network and instructional content.
The plan includes faculty development and assessment of instructional material effectiveness (Arizona State Board of Directors for Community Colleges, 1999) We currently depend on online advertising as our main way to reach new buyers. As we change strategies, however, we need to change the way we promote ourselves. We will be refocusing on our core message of service through radio, cable TV, sales brochures, direct mailers and newspapers. We need to sell the company, not the product. The most obvious and important trend in the market is decreasing prices. This has been true for years, but the trend seems to be quickening. We see technology markets systems with amazing features at amazing prices. Larger technology companies have the ability to sell these products at a less expensive rate. This may be related to a second trend, which is technology updating. By the time a technology needs upgrading, it is cheaper to buy completely new.
References Arizona State Board of Directors for Community Colleges, P. X. (2001). Arizona Learning Systems Business Plan. Solomon, G. T. and Whiting, G. B. (2004). Keys to the future of American business. Proceeding of the creativity, innovation and entrepreneurship symposium. 3rd, Framingham.