Plantronics Single Concept Analysis

Joos Potter

STMG191

Introduction

Plantronics is a large, multinational, for-profit company based in California, USA, that produces a range of cordless and wireless headsets for mobile communications use – add more here

STEPP Analysis:

Social:

  • With the increased needs for communication in today's world, people are becoming more likely than ever to carry mobile phones, and thus the need need for headsets increases
  • People are becoming more obsessed with aesthetics and 'smarter' shoppers than before – they are looking for products that are both well made and look attractive

Technological:

  • The emergence of electronic commerce allows businesses to become more effective and efficient
  • The emergence of VoIP is increasing the number of microphones and headsets purchased significantly
  • The rising popularity of Bluetooth as a medium for wireless headsets has opened another marketing niche

Economic:

  • The US economy is slowing, making many US-based businesses considerably more cautious of purchasing new communications devices
  • It is now less expensive to purchase a mobile phone, and thus more likely for people to have them

Political / Legal:

  • In most parts of the world, it is now illegal to use a phone without a hands-free headset when driving a car at the same time, neccesitating the purchase of a headset

Physical:

  • The ever-increasing desire for products that are ergonomically designed and comfortable to wear and use

SWOT Analysis:

Strengths:

  • Plantronics is renown as a market leader of the headset industry, and looked highly upon internationally.
  • Plantronics' products are well known for high quality and clarity of sound, establishing a reputation that people can rely on to provide good products.
  • Plantronics' headsets have a reputation of being very comfortable to wear, allowing for higher productivity for the wearer and reduced discomfort and fatigue.
  • Plantronics maintains dozens of OEM distributors as intermediaries, reducing the instabilities that can occur if a company relies on only one or two intermediaries for it's sales.
  • Through the use of information technology applications, Plantronics can maintain high levels of quality through analyzing the cause of defects in products, as well as design it's products to be more ergonomic.
  • Plantronics has branched out into other markets to both increase it's profits and to provide contingencies – such as acquiring amplified telephone manufacturers Walker and Ameriphone as well as purchasing speaker manufacturer Altech Lansing.

Weaknesses:

  • Plantronics' main market, business and telecommunications headsets, has a long product lifecycle, and thus repeated sales to businesses in that segment may be rare
  • Plantronic's products are predominantly aimed towards a high-end market, which may result in them losing market share to other, budget-orientated headset manufacturers
  • Plantronics' current production facilities are not able to properly cope with the number of orders they are recieving for mobile phone headsets
  • Having too many intermediaries on the supply chain is creating a need for long lead times and heavy levels of planning to maintain operational effectiveness

Oppurtunities:

  • The extremely lucrative Bluetooth headset market, which is expected to soon eclipse any other forms of mobile phone accessory, and which Plantronics would benefit from a higher market share in
  • The VoIP market, which is predicted be used in at least 5 million households by as soon as th end of 2006

Threats:

  • The mobile headset market is quickly becoming crowded as the trend of having a mobile phone becomes more common than ever – not just by heavyweights such as Motorola and Logitech, but also by innovative new upstarts such as Aliph, who bring new technology and ideas that could threaten Plantronics' market share
  • The threat that mobile phone manafacturers such as Nokia will attempt to enter the headset market by including headsets packaged with their phones, damaging the marketshare for 3rd party headsets for phones
  • Related to the slowing US economy, Plantronic's sales margins on business-related headset sales have decreased significantly as more businesses take the "wait and see" approach

Problem Identification

One of the major issues in this section will be competition from other businesses.

Concept Discussion

Concept: Productivity and Organizational Performance (effectiveness and efficiency)

Concept Explanation:

Productivity and Organizational Performance is about effective utilizing available resources and, at the same time, satisfying customers with products that are 'value for money'.

Important in Productivity and Organizational Performance is the ability to add value – the ability to perform operations in a way that makes the product output generate more profit when sold than the cost of the resource inputs.

Productivity is split between two core dimensions: (1) Performance Effectiveness: The speed of which products are produced and the quality the products are produced at, and (2) Performance Efficiency: The cost of resources involved with the production – usually measured in comparison to revenue from sales of the product.

Concept Application

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Concept Limitations

One criticism I have of the Productivity and Organizational Performance concept is that it does not seem to factor market share and profitability – a company could be perfectly efficient and perfectly productive – but if it only controls, say, 1% of a market, it's actual revenues will be miniscule in comparison to a somewhat less efficient company that controls 50% of a market. While productivity and cost effectiveness are important factors for an organization, they are moot if the organization cannot make a reasonable profit.