Catatech Case Study Solution

1070 Words 5 Pages
Catatech has had a sustainable and competitive advantage for nearly a century, since the introduction of the company by Jose Fernandez. However, with time comes innovation and change and this poses a conflicting problem in the company. With the rise of the internet, Catatech is absolutely not at a competitive advantage. In fact, they are more at a competitive disadvantage. eHerramientas, a company that seemingly rose overnight already has an advantage over Catatech. They offer overnight shipping to anywhere in the world. Currently Catatech does not have a widespread distribution service, so serving anyone outside of their three main locations is difficult. Unfortunately for them, customers will more likely than not go with the company that …show more content…
Locally acquired subsidiaries are more autonomous by having their own management, specific pricing strategies based on region, and some speciality products leading to a lack in cohesiveness for the entire company. The U.S. branch creating its own website shows that the company is not using its resources to the full potential. A company wide website would produce better results than individual sites per location, creating confusion and instability. Catatech has three locations that can serve within their respective regions to handle the transition to e-commerce. Implementing e-commerce offers the entire company a wide range of cutting costs and increasing profits through tracking website traffic for specific products and promotions thus enabling marketing to determine what products sell best in what region via which promotional and pricing strategy. Currently Catatech expects that its independent locations “meet the numbers”. There is no standardization for any operations from location to location and the company’s resources seem to be flawed in distribution because of the lack in standardization. The reason why the current dilemma exists is because communication from one branch to the next is limited. For example, the U.S. branch starting its own website apart from the company. If Catatech and its branches would collectively collaborate they would be able to maintain comparative advantage in the industry by …show more content…
This prevents the board and CEO from implementing company wide strategy to sustain its comparative advantage. Local sales organizations under Catatech have operated as separate entities developing their own strategies when it comes to management, pricing, ERP, finance and even manufacturing. Pushing for a company wide e-commerce strategy would reel in the local organizations from their autonomy creating conflict with the main branch in Madrid. The present issue of installing e-commerce throughout the entire company would most likely mean having one main branch handle all internet related sales and thus as Marisa noted would undermine other locations of their sales. If the company were cohesive in the way it operated creating standardized strategies, only allowing some variation, it would be much easier to move into e-commerce. The problem lies in the inability of the board and CEO to govern the main branch and all of the subsidiaries under one

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