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TMCVocabulary

How to Take Share with Technical Support

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By Rob DeRobertis

Rob DeRobertisSituation
In the early 90's the advent of the Windows interface and a decline in PC maker prices helped drive explosive growth in the PC industry. From this growth emerged a new market that turned into a multibillion dollar industry by itself - gaming. The audio features in gaming - producing realistic sounds to accompany action games - continued to build wide-spread traction, and in turn became a driver for even more PC market growth. Looking to capitalize on that growth, the Company made a strategic investment to develop components for PC audio sub-systems.

Despite the booming growth of the PC market, The Company's audio chips failed to become a sustainable profitable business. During its first six years the unit sold its chips to sub-system manufacturers in Asia who supplied add-in cards to US and Japanese PC makers. The sub-system vendors competed strictly on cost and had neither the ability nor the inclination to promote the technical value that the Company's sub-systems provide. In its best year the audio chip business sold 2 million chips, at prices that averaged between $4-5 per chip. A major part of the problem was that the Company's strategy was not tied to the market leaders, forcing the Company into a reactive mode.

The lack of business success led a senior Company executive to scold, ".the unit, and its strategy, was nothing short of a recipe for disaster."

How Strategic Marketing Course Concepts Apply
By 1998 it was clear to Company management that action to correct the problem needed to be taken. A new audio Product Line Director was appointed and made immediate changes. His first action was to halt a number of development projects and focus all remaining resources on a new PC audio architecture which the group was developing in partnership with market leaders Intel and Microsoft.