TradeSys faces now a dilemma: it has acquired a dominant position in its vertical market and there are very few growth opportunities there. So, a choice has to be made between staying in that market and focusing on customer service and service contracts making the current customer relationships deeper and so by increasing the average return per user (ARPU), or moving into new markets, meaning either new vertical markets, or the same vertical market in different market areas.

Staying in the acquired niche assumes very little growth, but as TradeSys products provide clear benefits for the customers and switching costs are relatively high, this is also a relatively safe choice. The company can expect modest growth through selling new features to the existing customers, and, on the other hand, steady stream of service fees.

To expand, the company has two choices:

  1. Diversifying into new markets

    • One possibility to expand is to diversify into new markets with software packages that are general enough to be sold to other types of associations that have to manage their membership and payments. These could be, for example, large trade associations, national youth or sports associations, etc.

  2. Exporting to foreign trade unions and unemployment funds

    • The other possibility to expand is to export the software into European markets and try to acquire market share there. However, the different national legal frameworks as well as business traditions need to be accounted for.

      Technically, the systems of TradeSys are componentized in such a way that it would be possible to develop new features needed in either of the new markets suggested above. The current technical challenges involve moving the services to web-enabled and mobile environments.

Annals of Cases on Information Technology
SQL Tips & Techniques (Miscellaneous)
EAN: 2147483647
Year: 2005
Pages: 367 © 2008-2017.
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