1330 words 6 pages
MBA 609
Daktronics, a company specializing in manufacturing electronic score board systems, is facing the issue of dealing with a changing environment in their market. Having invested a large amount of capital into their large sales force, the company accrued “relationship capital”. However, increasing involvement of consultants in the market changed the market structure, their good will or relationship capital may not be enough to maintain their marketshare. The presence of the consulting firms coupled with poor market conditions and sometimes hostile relationships with the consultants eroded Daktronics profits. The company now must decide what they are to do as a result of the changing environment in the large
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This last approach would require that they be more knowledgeable about their competitor’s products.
Ignore the consultants and continue with what they are doing
This option does not require any additional effort or capital on Daktronics part
They already have the largest market share in the industry
They would still win most of the consultant assisted bids
Consultants may still have a confrontational relationship with Daktronics, ignoring the problem would allow them to continue to talk down on the company and their products.
Profits can continue to erode if they don’t face the problem
Try and work with consultants
Working with the consultants could better their relationship with the consultants.
Working with consultants may sway them to recommend their product to the buyers.
Working with consultants may educate them on the company’s strengths which they may not have known before.
They would probably need fewer sales representatives if they worked with consultants.
Consultants still get a cut of the deal even if the buyer purchases Daktronics product.
Trying to work with consultants gives the consultants more power to demand lower pricing and kickbacks
Requires more effort on Daktronics part, but does not guarantee increase in sales
Train sales staff to work more like consultants
This approach puts the needs of the buyer first, by counselling the