| | Case Analysis | | |
During 1998 the telecom market space was inefficient and fragmented because most buyers and suppliers uses traditional procurement process. The process requires the buyers and supplier to individually purchase the telecommunication equipment that are needed in expanding or increasing their performance level. The procurement decision making involves a range of technical staff, such as network administrators, and telecommunication engineers to executive management such as, Chief Executive Officers (CEO) and Chief Technology Officers (CTO) which cause the complexity over the process. The process become more complex as there is rapid change in telecommunications industry, where buyers find…show more content…
(Hutt and Speh, 2010)
After one year of operation, market leader had recognised and agreed that Telezoo provide a good service. Although Telezoo manage generate positive press, it was still unable to convert accolades (good impression) to financial success. As a result, Telezoo had unsuccessful in generating revenue through its service and not able to record any complete transaction. This is either because the market did not get their message or choose not to respond. At the end of May 2000 the number of customers visiting their website is less than five thousand a month with nine contracts with the suppliers. The company has less than $60,000 revenue with $1.5 million spending for sales and marketing program annually. In addition, Telezoo also need to fill in their CEO seat and looking for a seasoned candidate which is not available until September (Hutt and Speh, 2010).
In conclusion, Telezoo had unsuccessful to fill the gap in complexity of traditional procurement process. Instead of experiencing profit, it found difficulties in attracting supplier and customers to use them as an intermediary.
The first solution for Telezoo was to re-segment their target market to whether micro-segmentation or macro-segmentation and readjust the cost of their service based on the target market. Telezoo need to re-segment