What is a strategic window?

The long-term strategic window is the limited periods in which the “fit” between the essential requirements of a market and the special powers of a company competing in this market at an optimum. In this paper we will use case VXL Instruments to develop the concept.
What is VXL’s Business?

VXL Instruments is enabling businesses worldwide to build a flexible, secure, manageable and cost-effective IT infrastructure. His range of thin client devices helps enterprises play the cycle of desktop obsolescence, free internal resources from non-productive functions, and save millions of dollars that is spent in the backup systems. The thin client is a server-centric computing model in which the application software, data-and CPU-Power is on a network server instead of playing on the client computer.VXL Instruments’ Highest IT hardware exporter award in the Non -SSI “for years 2006-2007.
VXL’s Dilemma

VXL Instruments is a leading manufacturer of thin client devices and commands 11% share in the global market. The large chunk of sales come from exports of the U.S. and the EU. The company is trying to explore new markets in India for its thin-client device. Competitors like Wyse and HP offer a variety of product not only in the West but also in India. Therefore, it is high time that companies begin to think about Indian market.
As in India, TC-market?

The company’s products as TC23xx and TC73xx are reliable and inexpensive. The (thin clients) to TC can assist in the eradication of various pains in the server-based computing. It is very useful in the case of SMEs (small and medium-sized enterprises), where computing requirements are quite specific. In the case of sectors such as hospitality, we have the different functions of unlocking value, so they charge a premium to explore. The main challenges are:

1st How to deliver maximum benefit without much more complex question?

2nd How to convince existing customers of fat clients to thin clients to change?

3rd As in India, TC-market?

In fact, the answer the third question we will be a picture of the work for finding the answers for the first two questions.

I will check VXL a minimum risk-taking company. It is more than customer-centric product. Therefore, the products of world class, but the penetration is not as impressive. VXL currently distributes its products through interaction with customers and third party, such as Priya Limited. This approach reduces marketing costs but the approach has its own limits.

In 2005, invested in Mumbai-based distributor Priya Ltd $ 2,000,000 (approximately Rs 10 crore) in equity in VXL Instruments. The investment was part of the agreement, trade finance VXL was $ 9,000,000 (around Rs 45 crore) to finance its growth.

VXL out plans for expansion and chalked up a growth strategy with a view to increase its market share of thin-client to 25 percent from 2007 to 2008. It has in various industries, such as ERP and health made incident, telecom, education and banking with clients such as SAP Belgium, Birmingham City Hospital, UK, DOT India, British Telecom, IIM Lucknow, IIT Roorkie, Haga and HDFC Bank India, Jakarta, etc. But currently a market share well below its target.
Product Awareness & Customer Perception

We can broadly divide the customers into two categories:

* Techno savvy customers with financial muscle that this type of customers who already know about the products (TC) and we have to convince them that thin clients a better option than fat client. For example Velankani group upcoming five-star hotel in Electronic City, Bangalore. The Velankani’s are in IT and infrastructure, and they are aware of the technology and its implementation. According to Mr. R. Shiva Kumar (Manager Information System, Velankani), should this type of customer better addressed if the product is in its embryonic stage. Once they fat clients (FC) to acquire for their project, they will not switch to an interest in TC due to over-cost. Here we have TC as a device that not only reduce the total cost of ownership, but also easy solution for all requirements in the comfort market.

* Less Techno Savvy with Medium-Range Investment Capabilities: These types of customers do not have their own IT department. They play safely in the rule and go for the fat-client technology that used by other players in its segment. More about they keep their IT requirements are minimal and not find, IT investments much more attractive. We need to educate them about the various benefits of Server Based Computing and the advantage over TC FC. These types of companies should be approached for the provision of total solution.

Market Redefinition

Frequently, as markets evolve, the fundamental definition of the market changed in a way likely to disqualify a few competitors and offers more opportunity for the other. The trend is towards marketing “system” of products as opposed to individual pieces of equipment, there are numerous examples of this phenomenon. We will discuss this point with the help of Docutel case.

Docutel: The manufacturer of automatic teller machines (ATM’s) supplies almost all ATMs in the U.S. by end of 1974. In the spring of 1975 found Docutel lose their market share to large computer companies, such as Burroughs, Honeywell, IBM, and how these manufacturers began to look to the banks total EFTS (Electronic Fund Transfer System) needs. They offered the bank a package of equipment to a complete system from which the ATM was only one component. In essence, can its success to the fact that the market in a way that seemed increasingly Docutel disqualify a potential supplier to be reassigned.
Completion

Market redefinition is not limited to the banking sector, similar trends are underway in the scientific instrumentation (steel, cement and aluminum industries), process control equipment (Siemens, Vesuvius and the market re-defined SMS), the machine tool industry, office and household equipment (VXL is already a player) and electronic ballasts, as some of the other examples. In any case manufacturer based its approach with the marketing of various hardware elements to see their “strategic window” close, as computer manufacturers are moving in the benefits of new ways to use. HP has sufficient TC market by some aggressive M & A. In India capitalized companies such as HCL Technologies and Satyam are planning to in the TC market as a provider of complete power. Wipro is also exploring opportunities to SMEs. We dare you to Wipro to expect in this segment in the near future.

As competition is growing SMEs are also increasingly slim. Most companies are following make-to-order philosophy of manufacturing. All these need a free flow of materials, information and finance essential change. Since in practice, many new applications for network technology have developed. Here we can see a scope for VXL, a consulting provider and not a mere product manufacturers.

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