Company X is a small technology company that produces one product (with several variants) that competes in a large, competitive market. Company X has been producing versions of this product longer than any of its major competitors, and it was the first to introduce several features that are now considered standard for products in this market. Its market share is small, but the technical competence of its product and staff is well-regarded, and many of its customers are fiercely passionate.
A Strategic Change
After struggling for years with interoperability problems caused by its relatively small market share, Company X decides to replace the two largest components of its product with those used by one of its competitors, Company Y — a very large company with a much greater market share. In short, instead of building their own product from scratch, Company X will now produce a heavily customized version of Company Y’s product.
- How is this decision likely to affect Company X in the short term?
- How is this decision likely to affect Company X in the long term?
- How are Company X’s customers likely to react to this decision?
- How are Company X’s employees likely to react to this decision?