Datavast Inc.: the Target Segment Decision Essay

1434 Words Feb 7th, 2016 6 Pages
1. Describe the data storage industry in China in this case. Include comments on technology and issues in accepting new technology?

“Data storage devices allow users to store digital files in a secondary location in order to prevent the loss of important information. Such devices came in many forms, depending on the needs of the users” (Hao, 2012). Prior to the introduction of the data storage industry in China, approximately 20 percent of small to medium companies were still using CDs as their form of data backup, or other outdated methods, such as external hard drives. Some Chinese companies did not use any form of data back up at all. Even the larger companies’ back up systems that they were paying millions for were outdated.
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3. (a) Compare and contrast IT suppliers and system integrators (SI).
System integrators have a continuous working relationship with their customers, who are usually larger companies. SIs introduce and sell product developer’s products to their customers. They would identify areas in the customer’s infrastructure that needed improvement, offer recommendations and educate them on new products that suited their needs. They also provided technical support; acting similar to an IT consultant; they built a solution for the companies by integrating the products. IT suppliers “compete based on low prices and sell individual components separately” (Hao, 2012). IT suppliers are usually approached by the customer requesting products or solutions and carried a large collection of products; making them not as knowledgeable about their products. Ultimately, SIs capitalize in marked up prices for solution packages sold to larger companies, making greater profits, while IT suppliers earn slim profit margins but offered a portfolio of products to sell.

(b) What are the implications for Datavast?
Larger companies typically use backed up systems for data storage, and product-manufacturing companies such as Datavast provide SIs with those products to sell to those larger companies. Datavast could charge RMB400,000 to SIs and considered providing them with a 30 percent margin on each sale as an incentive for them to push