Zenith Technologies Strategic Planning

Zenith Technologies Strategic Planning
The purpose of this paper is to summarize the results of the marketing audit carried out at Zenith Limited technologies – an industrial automation service company established in the Republic of Ireland 10 years ago. Zenith Technologies employs more than 250 professionals working in projects and supporting many companies' industrial operations. The marketing audit includes the finding on three environmental aspects that affect the company marketing strategy. The paper also contains the marketing situation of the company, an executive summary, and the conclusions of the audit. The environmental aspects studied in this paper are the following: economics, market, and technology. The marketing situation for the company encompasses the objectives, strategies, tactics, 4Ps, and sales for the year 2006.
Executive summary
During times of market growth client needs are easily identifiable because they shout for products or services require. This was the case for the automation market in Ireland 15 years ago when multinational pharmaceuticals started to establish facilities in the country. In 1998 the engineering automation market in Ireland was just about to absorb all the resources in the island. The scarcely resources gave way to a rapid and unexpected demand for automation engineers. Supply was not enough in for the market. Zenith Technologies CEO's great visionary could see the immense business behind the situation. The companies were looking for those resources and they were ready to pay good money for it.
Zenith establishment is an example of hard work and different vision of the business world. Even though the market was small, the business was 100% profitable from the beginning, low risk, and little investment required. The trends and forecast showed a great deal of investment coming to the country from those multinational companies. The integration of the country to the European markets was a key event to start that invasion of foreign corporations. That was the perfect time to start a company like Zenith because of the high demand for automation job will follow. An early start would ensure recognition at some time in the near future and the company would be positioned in the Irish market sooner than later.
However, almost 10 year after those smart thoughts, the situation is totally different. The company' objectives have changed; it is now time to look for foreign markets to keep the business profitable. The organization has acquired the expertise to move beyond the border of the island and offer its services to the same brands in other locations. This aspiration puts zenith Technologies in the position of commence to revise the entire organization and make big moves in hiring people with experience in multinational corporations to plan, coordinate, and implement sophisticated marketing strategies to achieve such a elevated goal of been one of the top competitors in the automation world for Pharmaceutical and Biotechnology manufacturers.
Although Zenith Technology is a small and young company, the goals are very high. To achieve those goals some recommendations are now presented herein. The rationale of every one of these recommendations is extensively treated in the next sections.
• The marketing department of Zenith Technologies requires a structural transformation. The organization must start, a soon as possible this process with an integral diagnostic must be hired. It is recommended to find an independent consultant to execute this task on the global situation of the company.
• The scaling up to the salaries in Ireland due to the scarcely of resource for such dynamic economic has risen the costs of the company. The company must be careful to avoid passing its high cost to the clients. Zenith Tech. must not contribute to the over-heating of the sector prices. Many clients may decide to withdraw Zenith as a service provider and start looking to the competition.
• Although the strategy to attract quality workers with high salaries is good, the company must start to train their own people. The new beginners can be mixed with the senior engineers and supplied to clients at low cost. In the long term these young engineers will be accepted world wide with the same confidence as the experience engineers. The advantage of this strategy is that the company can stop the need to hire expensive engineers in the future every time a new customer is gained.
• Zenith is in the position to open offices in other location in the world where pharmaceutical and biotech companies have businesses. India, for example is an excellent candidate for the next office. The company has achieved great recognition in the Irish market and extended that recognition through the internal channels of its customers. This is a competency advantage that the company must implement very quickly before other local firms become stronger in those countries.
• The company must work hard to diversify its products. The products and services offer at the moment is too narrow. Many engineers have potential to understand and configure more than one control system. This should become a specific objective for the next year.
• There are many independent institution dedicated to studied the different markets in the industry and in this particular case, the pharmaceutical industry. The company must establish a minimum level of marketing research using those independent agencies to redirect and create new products.
• The organization must reinforce the marketing department and establish a program of competitive intelligence. It is true that a programs like this for Ireland are not required because the size of the market. However, if the mission of the organization is to trespass frontiers the competition has already business where Zenith Tech. is just starting to offer its services.
• The organization must establish a marketing strategy in order to achieve the goals for the short and long term. A complete plan must be developed using the marketing mix tool and the marketing research recommended before.
• The target market is so far happy with the DCS on which Zenith Technologies engineers best know. However, the maker of that DCS can start losing preference as their prices go up and up. As stated by Blois, "In accordance with the nature of marketing itself, the underlying idea is that demand is neither certain nor decided upon by the marketer" (2000).
• An audit system of the organization has to integrate a section for the marketing department. There will be not benefit to implement a marketing strategy without an evaluation system that helps the department to improve performance and correct deviations. Marketing audit is vital part of a marketing strategy. "Firms need to evaluate their marketing ability and performance. Environmental changes and the need to ensure that the firm's competitive advantage is sustained and developed imply a need for an objective assessment" (Rogan, 2003, p.441).
• The effecting of a marketing audit should not be tied to the implementation of a marketing strategy or plan. It could be better to start the process of the marketing department reorganization with a good marketing audit. "Regardless of whether an internal marketing audit has ever been produced in the past, it is a good idea for the directors of sales or general managers (in cases where a sales department doesn't exist) to complete a marketing audit as part of their preparation for the writing of their next annual marketing plans" (McCarthy, 2005).
Table of contents
Executive summary 2
Economic 8
Market 11
Technology 13
Marketing aspects 14
Objectives 14
Strategies 15
4 Ps 16
Sales 18
Conclusions 18
Reference 21
Environmental aspects
Economic
The Irish economic has enjoyed an incredible injection of foreign capitals during the last 3 decades. More than 30 years ago the government decided to open to oversees investments by lowering the corporation tax rate to 12% (Euromonitor, 2007). Since then the economic has been steadily growing at rate higher than 6%(see Figure 1) - well above the European average.
Figure 1: Irish GDP(ESRI, 2007)
The rate of unemployment has been around 4% in the last decade (ESRI, 2007). According to Euromonitor (2006), the low unemployment rate is the result of the great deal of jobs gained in the construction and service sectors. The giant multinational companies' investment in the country is the main driver of the service sector expansion. These companies not only hire many of the non-critical activities but also some very specialized jobs required on temporarily basis.
Salaries in Ireland have increased more than 300% in the last 10 years. The high rate of economic growth has brought to the country thousands of job opportunities. The Irish labor force was not enough to cope with the vacancies created. As a result, companies have been competing to attract the most experience and educated people. One of the main forms of attracting people is by offering higher salaries to move into a new job.
The Irish economic has been tied to the United States since the policies from the Government to attract foreign capital started 30 years ago. However, the European Union (E.U.) is the biggest market for Ireland products and services. Around 60% of the total trade of Ireland is with members of the E.U. Computer technologies, pharmaceutical, and services companies are the bigger players of the trading between Ireland and the members of the union. (The Economics, 2006)
Finally, the price index has been increasing during the last years. The cost of living went up 28% from 1995 to 2005. The main factor influencing this increase is the housing which cost has gone up more than 90% in the same period of time. (Euromonitor, 2006).
The economic situation of the country in the last years gave Zenith owner the opportunity to start his own business. As explained above, the establishment of multinational facilities opened a big market for services companies like Zenith Tech. Before 1998, multinationals had to find resources and hire the service from The United Kingdom due to the low demand for automation engineers. Between 1994 and 2000, just before the introduction of the Euro currently and the full integration of Ireland into the European Union, many multinationals selected Ireland to establish operation because of the low tax policy, low salaries, and well educated labor force.
Mr. Bredan O'Regan decided to offer the service in highly skill field of industrial automation after analyzing the trends in the pharmaceutical sector and initiating a incredible survey in the automation sector. Mr. O'Regan started the company with less than 10 workers back in 1998. The main jobs given were mainly subcontracts to the foreign automation companies requiring permanent personnel on client facilities. Throughout these ten years Mr. O'Regan has attracted the best of the Irish workers by offering stable jobs and high remuneration. The strategy of Zenith technology is to offer a high quality service to its client, with experienced engineers who had worked in the sector and are widely recognized by clients.
Zenith Technologies is today the larger automation service provided in Ireland. Clients have signed agreement of automation support and given the company big projects in the country and abroad. The key of the company to succeed has been keeping the remuneration for employees above the average, low profit per individual engineers, and charging clients higher rates when they ask for specific engineers. The main proved strategy here is to tell clients that these are the best people for their needs; as the requirements of pharmaceuticals are very strict and quality for these companies is above anything else. Zenith has achieved its purpose.
Market
After 10 year of existence, Zenith management is expecting a soft landing of the economic growth and the foreign investment in Ireland. For this reason, the company is looking to the market of automation around the world. The company has established offices in Singapore, The United States, and The United Kingdom. In these countries and Ireland the main clients of the organization have facilities and projects. According to Datamonitor (2007), the market in Asia will grow almost 5% a year until 2011. For example, Novartis, one of the companies which have signed an agreement with Zenith Technologies for global automation services will invest $5 billion in a new facility. Decision on the facility location is still to be made between Ireland, India or Singapore (Zenith, 2007).
Zenith is also assessing the possibility of opening new offices in India and China. The company has been invited to bid for a project in India. "The company has put together a quotation for the project and the Indian office will go ahead if the project is awarded", said Zenith Technologies chief project manager Jim Lehane.
The reality of the Irish market for the automation industry to provide service to the pharmaceutical and biotechnology industry is not very promising. Companies are not looking with good eyes the high salaries paid to Irish workers nowadays. As a result, it is expected that many pharmaceutical and biotech projects go to other locations with cheaper labor. Zenith Technologies has to be ready for that challenge.
The marketing department of the company is based in Ireland. There is not marketing office in other countries to research and analyze the market in those other markets. Normally, if a project is going to take place outside Ireland, the office in the country' project has to coordinate the marketing strategy with head office in Cork. This approach may bring some lack of accuracy as the environment and economic indicators are different from country to country. The organization must look to create autonomous offices that can lead and make their own businesses, including the marketing strategies and planning.
Technology
Technology in the automation area keeps advancing at giant steps. As the computers and information system make revolutionary discoveries and developments, the same happens with the automation technology. Automation uses the same computers and processors used to build system of information.
One of the quality objectives of the company is to achieve excellence in automation technology (Zenith, 207). The company has developed software standards to guarantee a solid work and make sure that any software is completed in the same manner, so any engineer can understand, continue, test, and put in service work that some body else has written. This is one of the strongest elements of the company's technology.
The company has also set up extranet communications software to link the five offices that the company runs around the world. This technology allows engineers in any location to work in any of the company's projects. For example, engineers in The United States are able to develop software for the same project as an engineer working from Singapore or Dublin. They will be connected online, which means they can talk and see each others work on their computers.
On the other hand automation technology is a very ample field. Nonetheless, according to marketing records of the company, in the last three years the main source of income has been the implementation of work in only one sector of automation, the Distribute Control System (DCS) configuration. Worse yet, the company only works with one of the five most prestigious DCS' in the world. Although the managers are aware of this weakness, there is very little done to introduce new platforms to develop industrial automation software for pharmaceutical and biotech facilities with other DCS'.
Marketing aspects
Objectives
The company mission is to be a world wide class organization in the field of automation solution by understanding and exceeding clients' expectations with the highest quality on the work delivered (Zenith, 2007). Zenith vision is to be main competitor in the market of automation services for Pharmaceutical and Biotech industry by 2011. The company is planning to open offices in strategy location from where several countries can be served. Exception to this are Ireland, and The United States where the company intention is to have more than one office to offer quick respond and confident to customers.
Strategies
When collecting information about the marketing department the findings were not very good. The company is restructuring the department because the CEO found out that the objectives of the companies needed a strong marketing department. So far, the marketing department role was limited to (1) price calculation for the services offered, (2) quotation preparation upon client request for project bidding, (3) send out small gifts to key people in the market, (4) call contacts in the different companies to find out what was coming for the company and make deduction from there.
The marketing strategy of the company was limited to make sure the proposal prices were competitive to bid the competition and still make good profit. This objective was achieved many times when competing for a local project. However, recently the company lost 2 big projects with foreign companies as a result of a too high proposal. As mentioned before in the paper, when the quotation does not take into account local competition in other countries, it is very likely to lose the bids.
Needless to say that if the organization does not have a marketing strategy neither planning will be. The organization must introduce the marketing strategies and tactics necessary in order to achieve the company's sale objectives. The introduction of the marketing strategies and planning must be accompanied by a modification to the company's audit system to evaluate marketing progress, processes, and results. To do this the company should have in place a good auditing system. According to Karapetrovic & Willborn (2001), "The dynamic and adaptive features of a well-planned and implemented audit system will facilitate and simplify suitable and effective integration of audit programmes and individual audits (p. 19). Auditing process is a key element to support the idea of continuous improvement by verifying performance, providing feedback, and producing recommendations to the structures and strategies in organizations.
4 Ps
Zenith Technologies is a services provider in the automation integration field. The company is in the position to take the needs and requirements of its clients to implement solutions in different distribution control systems. Currently the company expertise is in DeltaV DCS. This is the favorite control system for pharmaceutical because the maker of this DCS designed it specifically for that industry. However, the prices of the systems are very high and pharmaceutical are starting to look at other options as well.
From Zenith Technologies prospective, the prices for an hour engineer are calculated based on his/her experience, last payment received in another job, number of engineer with the same profile in the country, and position in the company. This research is not very complicated for the marketing head because the number of companies and engineer in the sector are all countable. Ireland has had shortage of Automation engineers in the last ten years and the number of foreign engineers is also of everybody knowledge. For instance, the price for Mr. Sean O'Connor - overall lead engineer in the company - is the highest in the company ( an probably in the country) with $130 per hour. Mr. O'Connor is 10 years experienced and has participated on the largest projects in the country in recent years. For example, He worked for Wyeth Biotechnical campus in Dublin where he was technical lead Automation engineer for a project of $ 4 million. On the other hand, the rate hour for a junior engineer with 3 years experience is around $60.
The channel of distribution of Zenith' product is direct. The company always negotiates with clients without intermediaries. The company promotion campaign is limited to make individual presentations to potential customers or in times of new projects. The presentation is a 30 minutes power point file containing the history, locations, organization structure, clients, certifications, and a brief summary of the main engineers.
Sales
In term of sales, last year has been the best for the company. According to Mr. Brendan O'Regan, the total revenue 2006 was $14 million. The company won five big project and 3 medium projects. Clients like GSK in The United States and Ireland, Novartis, Wyeth, and the German Pharmaceutical Schwartz. The company employed more than 100 people to complete all these projects within budget and on schedule. However, there were also some project lost with the competition and some others that were too big for a company like Zenith to take.
There is no doubt that the company is well recognized in Ireland but to achieve what is written in the mission statement there is still much to do. Although, almost all the big players of the pharmaceutical and biotech world are present in Ireland, many of these companies do not consider Zenith as a company that could go outside to service other countries. That is why the offices in other countries most be given more independence and budget for marketing.
Conclusions
The boom economic situation of the country was the driver of Zenith Technologies creation back in 1998. The high rates of economic growth sustained for more than 20 years allowed the company to expand their businesses in a remarkable speed. It has been a great achievement of the company's CEO to put Zenith Technologies in the place where it is at the moment, after starting with a hand full of engineers, and having today the biggest automation team force in the island – about 150 engineers distributed on client sites and around 100 project engineers strategically located in the five offices in four countries.
However, with the increase in work force, it is also required that changes to the organization are implemented. For example, in the marketing department the company must seek for sustainability of the business in the long term. The conditions today are not the same as those 15 years ago when the automation engineers where really scarce and the work of Zenith Technologies was more kind of a recruitment agency, looking for people and offer them to manufacturing companies or foreign automation integrators working in the country.
Today the economic is starting to slow down in the country. The only way for the company to achieve the goals set is to go out to offer the know-how and quality of the engineers and managers that have worked in the biggest project in the pharmaceutical and Biotechnological world in recent years.
The company' managers have understood that these changes are required. They are working toward a more solid company and have started by changing the objectives of the organization. Zenith Technologies is not more a local Irish company trying to open its way in the local market. There are new goals in the global market of automation. The next step must point out to design and implement the marketing strategy and planning in order to achieve what is proposed in the vision and mission statement of the company.


Reference
Blois, K. (2000). The marketing mix as a creator of differentiation. Waterschoot, Walter Van, Oxford Textbook of Marketing p181 31p. Retrieved May 22, 2007, from EBSCOhost database.
ESRI. (2007). Irish Economy. The Irish Economic and Social Research Institute. Retrieved Jun 26, 2007, from http://www.esri.ie/irish_economy/.
Euromonitor (2005). Consumer lifestyle – Ireland. Euromonitor International: Country profile. Retrieved Jun 12, 2007, from Euromonitor Global Market Information Database.
Euromonitor (2006). Has the Celtic Tiger been tamed? Euromonitor International: Country profile. Retrieved Jun 12, 2007, from Euromonitor Global Market Information Database.
Euromonitor (2007). Ireland: Country Profile. Euromonitor International: Country profile. Retrieved Jun 12, 2007, from Euromonitor Global Market Information Database.
Datamonitor (2007) Global Pharmceuticals (2007). Datamonitor Reference code:0199-0372. Retrieved Jun 27, 2007, from MarketLine Database.
Karapetrovic, S. & Willborn, W. (2001). Audit system: Concepts and practices. Total quality management 12(1) 16. Retrieved Jun 2, 2007, from EBSCOhost database.
Kerin, R., Hartley, S., Berkowitz, E., & Rudelius, W. (2005). Marketing: Initiating the Marketing Process. [University of Phoenix Custom Edition e-text]. The McGraw-Hill Companies, New York. Retrieved May 22, 2007, from University of Phoenix, Resource, MKT551— Marketing Management.
McCarthy, T. (2005). Internal marketing audit pays for itself. Lodging Hospitality 61(11) 2. Retrieved May 31, 2007, from EBSCOhost database.
Rogan, D. (2003). Marketing: an introduction for Irish students. Gill & Mcmillan, Dublin (IE).
The Economist. (2007). Country Briefings: Ireland, Economic structure. The economics.com. Retrieved Jun 20, 2007 from http://www.economist.com/countries/Ireland/profile.cfm?folder=Profile%2DEconomic%20Structure
University of Phoenix (UOP). (2007). Marketing Audit Overview. Retrieved May 31, 2007, from University of Phoenix, Resource, MKT551— Marketing Management.
Zenith. (2007). Zenith Tech. Quality system. Zenith Technologies, Cork. Retrieve Jun 22, 2007 from Zenith Intranet Information System.