T.A.G. Partners System Case Analysis Essay

1939 Words Jul 7th, 2009 8 Pages
*TAG Partners System*, Inc. TAG’s business plan is to provide small trucking companies complete back office solutions and strategic alliances to eliminate the competitive advantage large trucking companies’ benefit from. The small trucking companies will receive greater revenue per mile and have lower operational expenses through TAG’s services, which are gained by leveraging a large client base, forming strategic alliances, and implementing their software. TAG’s management team is offering a 20% stake in the company for $100,000 in equity funding. Management’s perceived value based on the 20% stake for $100,000 indicates a valuation of $500,000 would be necessary in order for an investment to be considered. SWOT Analysis …show more content…
Bargaining Power of Customers TAG’s business plan does reduce the bargaining power of customers. TAG’s referral model will entice users of the software and services to be loyal and help recruit other small trucking companies. Also, the current lack of other end-to-end solutions does not give the customer bargaining power, although the customer can utilize the services provided by TAG individually by going directly to the source. Threat of New Entrants TAG plans to implement perpetual patenting, which should help discourage direct plagiarism, but will do little to limit new entrants into the market. There are already several established competitors offering some of the services TAG wants to provide, but it wouldn’t be too difficult for the established companies to imitate TAG’s business model if it is lucrative. Threat of Substitutes Currently, trucking companies can go directly to the companies TAG has placed strategic alliances with on their own to gain the same competitive advantage without paying a monthly fee. Also, established fuel card company Comdata and factoring provider Systrans Financial already offer national operations and have a solid customer base. DAT Services is highly recognized in the small trucking industry for load matching services. The ability for a small trucking company to go with an already established business, which may offer

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