answersLogoWhite

0

Differentiation of product from those of competitors; where IT companies do try and move in a different direction than the pack success can be limited due to a number of factors. These include solution costs being higher than competitor's (which can have an impact on sales even if the solution does provide greater comparative value) as well as customers' potential hesitancy to move from industry standards due to past experience where non-standard offerings are later dropped by the vendor). Difficulty (for sales/marketing/solution architects within IT companies) in aggregating their business's siloed product and services business units, as well as those of their partners, to build solutions that add value to their customer's business. Customers who approach IT vendors with suspicion, or are unwilling to partner with a vendor but instead make purchasing decisions based primarily on price. This in turn reduces the value they receive from their IT vendors, who become less willing to spend time understanding the customer and developing solutions to assist in their business, as all of this time and IP can be taken and tendered to the market by the customer, with the purchasing decision being based on the lowest price rather than the IT company who invested in developing the solution. The ongoing movement of funding from R & D to marketing. IT companies are often concerned that differentiated products will not be successful in the market (as noted above); even if the developed products are of greater value to the market than the current standards the increase in sales cycle time for new/unproven solutions raises the cost of sale, thereby reducing profit. Once the product does gain enough traction in the market to start making profit and recoup the development costs it will generally be replicated by competitors who commoditise the solution (as they have no real development costs to recover, and also need to make the sale based on price as they are not perceived as the leader in this area) and drive down the product margins. Therefore IT companies often view it as cheaper/easier to differentiate the customer's perception of their brand rather than investing in true innovation. Continual reduction of resources and services being made available to customers (both internal and external) in a bid to reduce costs. Although this is obviously an issue for not only IT companies they are being impacted more than most businesses, primarily due to IT being one of the more recent sectors to move from a growing, high-margin model to a more stable, mature business; with the falling profit margins shareholders and management see a reduction in costs to be a quick and easy way to offset the resulting devaluation in share price.

User Avatar

Wiki User

17y ago

What else can I help you with?

Related Questions

2 challenges that many companies face in ethics?

what are two challenges that companies face in ethics


How do marketing companies deal with macro-environment challenges?

How can macro- environment challenges be managed


3 How can companies use IT to meet the challenges of Data Resource security?

Companies can use IT to meet the challenges of data resource security by using companies such as Vontu Inc. and Opsware Inc. These companies help protect data that is important to the company.


What are Kellogg's current challenges?

eating nuts?


How do most companies pay current liabilities?

Out of current assets


Current position of IT companies field?

answer current position of it sector


What are the current trends in the stocks of marijuana companies?

The current trends in marijuana company stocks are fluctuating due to factors like regulatory changes, market demand, and company performance. Some companies are experiencing growth while others are facing challenges. It is important for investors to closely monitor these trends and conduct thorough research before making investment decisions.


What are 2 challenges that companies face in the area of ethics?

they are courtesy and consideration.


Insurance Companies have a current ratio?

yes


What is e-transition challenges?

When IT companies investments are controlled and clear, it helps in e-transition. Also, capabilities of a corporate is one of the challenges that is faced.


What is your current job and what you do and what is your current employer's profile and what are your major challenges and why would you be willing to leave your current employer?

my current job is teaching geology and i have applied to do seimic survey


What is the underlying cause of many of East Africa's current challenges?

Disease