Augat Electronics Essay

1911 Words Sep 6th, 2011 8 Pages
Augat Electronics Inc.
- A Case Analysis
1. Critical Issues
Canadian market for Cable TV connectors is expected to grow substantially in the coming years. Given the current product quality and the maturity in Value Added Services provided by the Cable TV companies, the basis for purchasing decisions seems to be changing. Given the current market share that Augat has and situation, it will be of at most importance to penetrate one or more of the multiple service operators (MSOs) that dominate the Canadian market. Augat believes that Snap-N-Seal might be the product that would help Augat reach mainstream status
The most significant problems in this case as far as Augat goes is their decision(s) pertaining to
a. Pricing Strategy in
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Moreover, a lower price might provide a lower perceived value by the MSOs, poor product quality as the reason for the lower price. So Augat would be better off pricing the Snap-N-Seal connector comparable to Raychem’s. By doing so, the company will be able gain better margins on their product. Additionally, the price will not be suspect to scrutiny. Although this strategy, enables the company to compare itself to Raychem in terms of price and quality it will possibly make it more difficult to persuade the MSO to purchase the product. This is exasperated by the fact that the tools necessary for the Snap-N-Seal connector are a capital budgeting decision that represents a considerable investment for the cable provider.
For the problem on distribution partner, Augat has the option to stick with White Radio, or to seek new partnerships in distribution like Anixter Canada, or Deskin Sales. Though this would help Augat enhance the coverage in terms of suppliers (or end-users) and a potential increase in market presence. However, on the other hand, Augat would lose the exclusive relationship it was with White Radio, knowing White Radio’s Steve Quinn’ knowledge about Cable TV MSO’s approval process. In addition, the other distribution companies also carry competitor’s products and there is no guarantee that they would push

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