External Analysis
By analyzing the external environment of ETI, this section will examine the customer, conditions, competition, and channels of distribution. We will be giving you a macro view of the industry prior to a micro look at the company.
In today’s fast-paced business environment, companies are looking for ways to be as efficient as possible. Businesses are attempting to keep their employees in their offices as opposed to traveling for their training. With the advancement of technology over the past decade, most employees have access to computers at both the office and their homes as shown in Exhibit A.
Target market for any online training program varies from program to program. ETI’s suggested target market consists of individuals aged 25-60. Doing some background studies, we came up also that these individuals have some sort of post-secondary education, are in a specialty field, and are majority sales representatives. However, some middle and senior management do attend their training seminars. Online training is steadily growing, especially the demand for it. The greater part of all sales and marketing representatives has received some form of training over the course of the year. Since the training program will specialize mainly in the agribusiness atmosphere, ETI will continue to focus their main priorities on rural markets rather than urban markets.
Traditionally, all face to face training seminars have been held in a centrally located area such as a hotel or in a company training office. These sessions have usually catered to 15 to 25 participants at any given time. With our research completed, we have forecasted how we see the training program working, and what benefits everyone will get out of it. Some benefits that are very visible are that ETI offers higher cost but receive bigger rewards. ETI’s structure is that of you can have a training lesson done at home or at an office computer that has accessibility to the internet. ETI wants to cut down of traveling costs as well as take as little time out of the daily hours of work to be excuses for training purposes.
Internal environment:
ETI was established in 1982 to provide marketing and sales training program for the agribusiness firm. Its entire training program conducted in face to face, classroom-type setting. ETI was very successful at the traditional way of delivery. Over the 17 years, ETI had gain a number of long-term, loyal customers in both Canada and United States. In 1999, ETI’s revenues have grown from under $ 100,000 to $1,200,000 since the first year which indicated the company is in the growing stage of its business life cycle.
For small and large agribusiness in North American, all the marketing and sales programme were custom designed and offered to client in the seed, chemical, machinery, animal health, and feed industry. Among these programme, two three-day ETI programs were most popular and generated almost 75% of the company revenue. They are “Principles of Agri Marketing and “Strategic Agri Selling”. ETI has become the leader in its own industry, by delivering quality program to the customers.
Key Marketing issue
Since the first day of the business, ETI has heavily depended on computer technology in developing and presenting programs. By the inspiration of an online education program, Tom, who is the owner and president of ETI, has recognized online program delivery is a great opportunity to expand his business. Furthermore, online program delivery is vacant in the market. If ETI takes the first step, it will create the competitive advantage for the company in the future.
Generation and Evaluation of Alternatives
Alternative 1: Do not develop Online Training Program
The first alternative is to cancel the idea of the training program and focus on what ETI was raised on. This is going to be continuing to provide marketing and sales training for agricultural companies. ETI will remain with all training programs being conducted in face-to-face, classroom-type settings. ETI was very good at this traditional method of delivery, and had a number of long-term, highly satisfied clients. This alternative will allow the firm to continue following its current product life cycle curve. ETI has been in the agribusiness for over 15 years. Revenues have been growing ever since its first year in business. Currently, ETI is nearing their maturity stage of the life cycle, and have gained a lot of profit on the way. In this stage, the company is forecasted to achieve high revenues and will be subject to very little risk in the near future. The advantage of maintaining status quo is that you don’t have to waste money and effort in research and development. A lot of time, effort and money will be wasting in providing answers for whether or not online training programs are the way to go. Plus, the implementation, and getting the training program up and started is going to be time consuming and very costly. So in the short-term, not going with online training programs are the way to go, but in the long-term, it may be different. Should ETI maintain the status quo, not expanding could cause the company to lose market share to competitors who offer online training first. This could result in a huge potential loss of money, customers, and clients. Not seeing this step in agribusiness before the competitors could have a consequence of running ETI out of business.
Alternative 2: offering trail online programming
Based on the success of PAM and SAS program, ETI can offer these two courses online in a trail basic. These two courses have generated over 75% of company revenue during the years. More new customers should be attracted by offering these popular courses online. The advantage of this alternative is that ETI can maintain the original customers by delivering the courses in the traditional way. The initial cost of implementing online programming can be lower due to the increased volume of customers. Furthermore, the market response can be generated. In a good respond from the market, ETI can take a further step into the online programming market. If not, ETI can cut off the operation instead of running full capacity into the online programming market. The disadvantage of this action is that cause ETI a high initial cost to implement.
Recommendation
After studying and analyzing the two alternatives, it has been found that the second alternative has the highest probability success. That alternative is to offer online training programs on a trail basis. Since ETI has almost completed the growth stage, and is entering the maturity stage, ETI will have to pursue a new product or a variation of a existing product. This approach will maintain the existing number of long-term and highly satisfied clients, as well as allowing the firm a possibility of expansion. The alternative is consistent with the company’s history of relying on computer technology in developing and presenting programs. Since product development is a key component in the maturity stage, this alternative will allow ETI to acquire additional market share from competitors. ETI will be the first agribusiness to do an online training program, so they will gain customers and clients from other competitors, and not losing existing clients. However, according to year one cost estimates shown in Exhibit B, this option will cost more than the original $400,000 Tom Jackson had projected.
The biggest disadvantage of the first alternative is that the company will not be expanding. In the short-term, this alternative will not affect the firm as it will be entering into the maturity stage of the product life cycle. ETI will continue to see high revenues and profits over the short-term, but will run the risk of losing business to competitors who offer online services.
After comparing both alternatives, we believe that offering online training programs on a trial basis will best achieve the firms’ objectives and is realistic with the situation analysis.
Exhibit A – Employees With Computer Access
Exhibit B – 3 year Forecast for Alternative 2
Exhibit C – Breakeven Analysis of Alternative 2
