Question

Please answer below two questions in your own words plz don’t copy and paste.

LEARNING FROM MISTAKES Analyzing the external environment is a critical step in recognizing and understanding the opportunities and threats that organizations face. And here is where some companies fail to do a good job. The fact is that few things really "sell themselves"-especially if they are new to the market. According to Booz &Company, 66 percent of new products fail within two years, and, according to the Doblin Group, an astonishing 96 percent of all innovations fail to deliver any retum on a company's investment. Consider the example of Salemi Industries and the launch of its product, Cell Zone, in 2005. Although it tried to carefully analyze its potential market, it misread the market's demand for the product and paid a steep price for its mistake. Mobile phone usage was sharply increasing, and its founder observed that patrons in places such as restaurants would be annoyed by the chatter of a nearby guest having a private (but loud) conversation.Salemi Industries interpreted this observation as an opportunity to create the Cell Zone: a “commercial sound resistant cell phone booth that provides a convenient and disturbance-free environment to place and receive phone calls .. with a design feature to promote product or service on its curvilinear outer shell," according to the firm's website. Salemi Industries' key error was that it failed to take into consideration an emerging technology- the increasing popularity of text messaging and other nonvoice communication technology applications and how that would affect the sales of its product. In addition to this technology shift, the target locations (restaurants) thought the price ($3,500) was too steep, and they were not interested in or willing to give up productive square footage for patrons to hold private conversations. Not surprisingly, the firm has sold only 300 units (100 of them in college libraries), and Salemi Industries has lost over $650,000 to date Discussion Questions 1. What is the biggest stumbling block for Cell Zone? 2. Are there other market segments where Cell Zone might work?

Answer 1

1. The biggest stumbling block for cell zone was not taking into consideration external factors which includes innovation in the technology and its usage. Since the company offers a private disturbance - free environment it should have taken into consideration other factors which may include customer usage and place of usage as well.

2. The company considered restaurants thus it confines its market. The industry should explore more public places like schools, railway stations,. It may take into consideration other public places where people might find this kind of service helpful.