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Public and Private Sector Collaborations Essay

Open research organizations and private firms work under very diverse situations and with poles a-part aims and objectives, which result in fairly different outcomes in the two types of organizations. Public researchers are mainly ambitious due to their willingness to expand knowledge and publish them in journals and magazines to help for the cause of bringing it to knowledge of the masses. On the other hand, private firms and ventures aim to achieve higher profits through commercially valid information that the firm builds up or obtain to be kept in the boundaries of the company and far away from opponents in the market or the industry. This usually results in the conflicts among the two forms of organizations and it is difficult to work in collaboration between the public and private organizations.

But it has also been evident from the past that, private companies and firms which have worked in public collaborations, although not many succeeded, but those who did, have been able to achieve goals and have set trends for other organizations to work for the cause of social development and enhancement of public systems for noble cause.

Current Situation (LoJack) and Strategy:

LoJack Corporation markets and authorizes the LoJack System, a unique, proprietary system used entirely by law enforcement workforce to track, establish, and pick up stolen motor vehicles.

The problem of vehicle theft has escalated to an epidemic level an estimated to result in an yearly loss of approximately $8 billion.

The LoJack System has an established track evidence of falling damages, striking public protection, and solving grave crimes related to motor vehicle thievery, all accomplished within the realistic restrictions of overburdened law enforcement structure.  Currently, LoJack has unique system designed to assist law enforcement in locating and tracking stole vehicles. Competition is fierce if viewed with Telemetric and GPS tracking devices. However, if we look at vehicle recovery systems, LoJack is the global leader with a law enforcement network that cannot be easily duplicated.  This law enforcement network is challenging politically and requires a high degree of local political assistance.  Financially, sales are climbing, but year over year growth is declining.  The distribution system through auto retailers seems stuck to new car sales.

The LoJack strategy at the present time consists of several discrete variables.  LoJack has elected to expand into new geographic areas and markets which is a logical growth strategy for the firm which has established an enviable reputation in terms of asset recovery systems.  This company has developed a new tracking unit that permits it to move into new segments such as trailers while simultaneously reducing costs for such units, therefore, establishing itself as a cost leader in the sector.    This combined with a strong differentiation of product through law enforcement networks gives LoJack a strong competitive advantage.  These are strengths that cannot be quickly or easily duplicated and because of the proprietary technical aspect of this product.  Competitors would have to try and find substitute products to compete directly with LoJack.

Competitive Environment

New Entrants

Teletrec and other competitors were on the market prior to LoJack’s entrance and other competitors are entering the market through GPS based systems such as ‘OnStar’.  These systems are not a onetime purchase but incur monthly fees to maintain service and may require the use of a cell phone.

Substitutes

Just as with GPS, there is a threat of substitute products coming on-line through new technology, but this threat should be mitigated by LoJack’s network with local law enforcement agencies.

Suppliers

Suppliers are also a threat as the auto industry is developing its own telematics technology.  The automakers have started relying on standards to speed up the plan cycle. Their incapability to bring state-of-the-art activity, communication, routing, and other “telematics” (navigation, driver-warning, and communication systems) evidently emphasize the manufacturers’ unwillingness to relying on these standards. The automakers came into view to have understood their errors and restrictions and are participating in the development of new network standards for both critical mission and convenience or entertainment systems. LoJack must continue to market its law enforcement advantage to thwart off this threat.

Buyers

At this stage, buyers have relatively limited buying power due to the lack of alternative technology. However, the threat is the heavy reliance on car dealers to sell the product.  If there is no incentive to do so, then the buyer may lack the knowledge that would drive the purchase.

Intensity of Rivalry

Although the product is in its growing stages, and there is no clear competition, the increased activity in this sector could be conducive of a threat to achieve a large enough market share to make the implementation worthwhile.

Perspective on network level strategy

Both LoJack and Micro Logic embrace the embedded organizational structure.  While they both have proprietary technology, they rely on other organizations to leverage these technologies.  LoJack’s technology would not have been possible without the alliance with local law enforcement agencies, Motorola, and Micro Logic.  Micro Logic’s existence had been to partner with organizations to influence its technological resourcefulness to additionally expand the companies that it works for.  It would take an evenhandedness stand in these companies and take a long term approach. In order for Micro Logic to be successful in this venture, it would need to rely on LoJack’s distribution and marketing systems. Not only to sell its products but also to ensure its own financial stability.

If LoJack is to review its long term strategy, it must understand that research and development are not at the core of its operation.  Motorola is a key component to both LoJack and Micro Logic and has been a strong partner providing vital assistance. They cannot be relied on to only provide this technology to LoJack.  They are a much larger company and will look to broaden their reach.  In the fall of 1999 Motorola was already working to become a driving force in the telematics industry and moved to position itself with the major car companies.

Recommendations

Short Term

LoJack should look to form a free alliance with Micro Logic. This would allow for LoJack to expand into the new market of construction equipment where need exist and no clear provider exist. An alliance between these two organizations has a proven track record and a proven product that can be marketed globally.

The alliance should tackle the construction equipment market. This is a market that has a strong need for a location and asset management technology there is no clear market leader and creativity and innovation in products play a vital role to become a leader.

The combination of LoJack’s proven solution for tracking and the ability of Micro Logic to develop strong asset management software would allow for strong penetration in this market.  Both organizations should look to work in their core areas of expertise. LoJack recognizes how to market and allocate the products and Micro Logic should right away assume the Research &Development purpose. This will allow both companies to continue to drive down cost. LoJack presently has sufficient cash on hand to assist the need for cash with Micro Logic.  At this point, the cash infusion should be done as a low or no interest loan to Micro Logic. The partnership works well over time, Micro Logic can establish if this is their core business.  If not, they will be able to sell this product back to LoJack just as it did the first time and move in a different direction or become a secondary firm to LoJack.  Motorola is currently working on the 3rd generation LoJack and Micro Logic should work directly with Motorola on this function.

Medium Term

Once a clear hold on the construction market is protected, then the alliance will have the opportunity to move into the trailer market. A proven track record in auto recovery and construction equipment asset management will allow strong credibility and should allow LoJack and Micro Logic to become the market leaders. During this stage both firms will need to determine the structure of the company and if they are able to grow construction equipment sales to the same rate as existing auto sales then LoJack would be in a position to either absorb Metrologic into the existing organization or turn Micro Logic into a subsidiary.

Long Term

Emerging markets will be critical to the long term success of LoJack.  With a strong foothold on the construction market this area would be a logical first step into emerging markets as contraction equipment would usually surpass new car sales.  Immerging markets will provide the strongest revenue growths for the company and is possible this may need to be moved into the mid-term focus depending on the success for the technology.


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