The business is trying to branch of to a complete new segment of maintenance that will create packages with the specific need to catering to marketing needs. The portfolio of the company thus is needed to be diversified in order to add the maintenance portion of the business in addition to the present sales based infrastructure that the follow. The portfolio should comprise the options of maintenance that they are giving which might comprise of multiple maintenance plans and also the specialized and differentiating factors that they are including as part of their new venture
With the advent of this new business segment that comprises of the maintenance portion the resources that the company uses need to be reallocated significantly. In terms of the human resources the company now needs a significant amount of the worker population to dedicated to maintenance services and the instant calls that they entail as part of this project. In the sector of the material resources the company as will be providing services now to the maintenance of machineries of various companies a steady supply of spare part of the different companies should be kept in stock so that they can be sold and made into a revenue stream or else they need to make partnership with a spare part dealer to maintain a steady supply of the same.
Alternative solutions to problems/issues
- Shift to a premium offering for the residential services division
This would create a new brand image about the company amongst the customers and with a premium offering it would be easier for the company to differentiate itself from the competition.
Pros – It would help in differentiating and also attract a new set of customers who are not price sensitive but quality sensitive.
Cons – Initial costs will be high and there has to be a complete change in the mentality of the company to bring about this paradigm shift.
- Open a coolant manufacturing division
Vertical integration would be new and innovative way to increase revenue of the company by increasing sales and reducing the interdepartmental costs.
Pros – Upward vertical integration is a very easy way to reduce costs in the longer term. Also it ensures quality as the things are made inhouse and improved revenue as with the new product, new clients can be captured.
Cons – In the short time, it incurs a huge amount of cost Also, since this is not the core competency of the company, it needs time to get a proper understanding about the product and its market.
- Expand to other regions of the country
It will give the company a bigger geography to play with. Also it would help them to tap a bigger market and implant a attraction for newness in the minds of the new customers.
Pros – It gives access to a bigger market, thus increase in revenue and market share.
Cons – Every new market behaves differently and hence flexibility is required to adapt to that and time is required to succeed there.
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