Paragon Information Systems

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Individual Case Analysis Memorandum Paragon Information Systems

BU481 – E Tabatha Dominguez Tuesday, November 29, 2011

PROBLEM AND RECOMMENDATION Paragon Information Systems is a wholly-owned subsidiary of Newtel Enterprises Limited, that operates in Atlantic Canada’s information systems industry. They meet their customers’ needs for information systems hardware and provide them with excellent customer service as well. There was recently a crisis as the founders of Paragon left the company, with the entire sales force, to start a new company in direct competition. Paragon was rebuilt and has become a stronger company since the founders left (EX1). Information systems hardware is a largely undifferentiated product so Paragon needs
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Implications: NewTel Enterprises Limited, which wholly owns Paragon, is committed to growing shareholder value and they believe providing excellent customer service is crucial to their success. Exhibit 3 - Atlantic Canada Information Technology Industry Analysis Threat of Substitute Products Threat of New Entrants Bargaining Power of Buyers Bargaining Power of Suppliers Intensity of Competitive Rivalry Porter’s Five Forces -Relatively low threat of substitute products -Computer hardware is necessary for an information system. -Barriers to entry are low, because of little government regulation and the lack of high upfront or fixed costs. -Bargaining power of buyers is increasing -There are few competitors in the market place but more are entering -Buyers are happy to see more competition -Bargaining power of suppliers is unknown -level of intensity is unknown -Hardware is largely undifferentiated

Implications: The information technology industry in Atlantic Canada is somewhat attractive. Hardware products are largely undifferentiated but excellent customer service can serve to establish switching costs. With the threat of new entrants and increasing bargaining power of buyers firms needs to offer more value than their competitors.

Exhibit 4 - Business Strategy Business Strategy Triangle -The underlying strategy is to become more client-focused, and provide responsive customer service
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