Term Paper on "Company Case Analysis"

Term Paper 18 pages (4736 words) Sources: 3 Style: MLA

[EXCERPT] . . . .

CQUAY Technologies Corp.

CASE STUDY ANALYSIS: CQUAY TECHNOLOGIES COR

In the past few decades, globalization has sparked a revolution in information and communication technology, resulting in an information age that boasts the arrival of new levels of global interconnectedness. This increasing growth in technology has revolutionized communication and has changed the ways companies do business. The Internet has created the world of e-business, where companies use Internet-enabled technologies to exchange goods, services or information and to deliver value to customers in entirely new ways. As a result, location technology and related services have emerged in the past few years as a significant factor for businesses and has simultaneously gathered a great amount of interest. Companies such as CQUAY Technologies Corporation have set the industry standard for business models, revenue models, and core competencies, all the while simultaneously establishing a competitive advantage.

This paper will provide a case study analysis of CQUAY Technologies Corporation, including a strategic profile of the company, an analysis of the general environment, an industry analysis and competitor analysis. It will also examine the company's critical success factors, conduct an internal analysis and a SWOT analysis. Finally, it will conclude with a problem statement and related recommendations for the future of the company.

Strategic Profile

CQUAY Technologies Corporation, a privately held Canadian company with offices in both Canada and the United States, was founded as a result of a joint operation to develop a technology platform to manage address and mapping information. CQUAY's predecessor company was the first company to demonstrate an online geo-coding and map portrayal service (Ivey Management Services, 2004). CQUAY emerged in 2002, offering commercial products and services in Canada and the United States and became a leading supplier of location technology and related services. CQUAY's product was a patented location intelligence engine called Common Ground, that enabled it professionals and application vendors to easily and cost-effectively incorporate address validation, location-based data integration and map visualization tools into enterprise applications, web solutions, corporate data warehouses or wireless applications. The Common Ground product was marketed to enterprise customers, software developers and systems integrators (Ivey Management Services, 2004). The Common Ground platform came bundled with high-quality map and address data for a "customer specified" geographic area of interest.

The Common Ground system was loaded with Location Data for a customer's geographic area of interest and installed within their it infrastructure, serving as a platform supporting a rich suite of Common Ground Location Services that are callable, via published Application Programming Interfaces (APIs), from other systems (CQUAY, 2004). The APIs were used by it professionals to add new features that enable customers to improve address data quality across all systems, organize, integrate and find information based on location, understand geographic relationships inherent in existing data, and gain business insights through the "lens" of location context. The Location Data was provided on a subscription model, subject to annual subscription fees that vary based on the extent of geographic coverage and number of locations/USLs that matter to the customer, and was available for a single city or town, a state/province or for all of Canada or USA (CQUAY, 2004). Designed for an emerging, multibillion dollar segment of the spatial information management market, CQUAY operated a facility called the Location Data Factory that took map and address information from a number of data suppliers, integrating it into a Master Location Database. The data available under Location Data Subscription for use within Common Ground included USLs for valid addressable locations (ADLs) in Canada and the U.S., street names and address manage data for major cities and towns, detailed street geometry, covering most road classifications, and mayor hydrological features such as major rivers and lakes (CQUAY, 2004). Also included in the subscription was census subdivision boundaries, Canada post boundaries and FSA centroid points, and USPS Zip and Zip+4 boundaries.

From a financial aspect, CQUAY was a little weak in some areas, a result of the industry at the time the company was founded. CQUAY'S predecessor company had intended to grow using private capital until it was large enough to undertake an initial public offering; however at that time, the capital markets were depressed (Ivey Management Services, 2004). In 2003, the CEO of CQUAY decided that a positive cash flow could be generated only means of adding additional capital. From an analysis of the company's financial statements, it appears that the company invested enormous amounts of funds in research and development as compared to other areas. Although the operating expenses brought down company revenues a lot, the company still was able to generate comparable revenues. In 2004, the revenue was as follows: software license: $312,000; professional services: $586,139; data subscription: $62,563; and maintenance: $48,263. In the 2005 estimate, revenues for the software license increased a little to $350,000, the revenue for professional services decreased around $86,000, and revenues for data subscription and maintenance nearly doubled. The financials for revenue for 2007 and 2008 predictions constantly grew, and the prediction for 2008 closes out with software license revenue at $14,350,000; professional services at $2,870,000; data subscription revenues at $4,620,000 and finally maintenance revenue at $3,477,500.

Although these numbers are impressive, they are reduced dramatically by the increasing costs allocated to research and development. For example, in 2004 the company spent $108,987 on research and development, and $175,000 is estimated for research and development in 2005. The predicted costs of research and development consistently increase dramatically in the following years, closing out in 2008 with a predicted $1,519,050, more than the combined 2008 revenue for professional services, data subscription and maintenance together. Thus, the company's problem statement and following sections of the paper will focus on lowering some costs with the goal of increasing CQUAY's total revenue. However, a strategic profile of the company indicates that it stands in a position of competitive advantage in the location technology and services industry.

Industry and SWOT Analysis

At the time that CQUAY was formed, the industry for location technology and services was already booming as a result of the problems faced by it personnel and companies. The global Geographic Information Systems market size was approximately $57 billion, including software, map data, related hardware and consulting services (Ivey Management Services, 2004). The definition of a SWOT analysis can be best described as an analysis that examines a company's strengths, weaknesses, opportunities and threats to draw general conclusions regarding the company's overall situation. The company can then use these conclusions to better match their strategy to their resource strengths and market opportunities, correct the important weaknesses, and defend against external threats. The first step of a SWOT analysis is to identify company resource strengths and competitive capabilities. Next, the company's resource weaknesses and competitive deficiencies must be identified. These results are then used to determine where the attractiveness of the company's situation ranks, as well as the attractive and unattractive aspects of the company's situation.

The next step is to identify the company's market opportunities, and to identify external threats to the company's future well-being. All of these steps are then used to improve the company's existing strategy. The company's strengths and capabilities are usually used as the cornerstones for strategy. The market opportunities that are best suited to company strengths and capabilities are pursued. Weaknesses and deficiencies are corrected, and the company's strengths are used to lessen the impact of major external threats. Assessing whether the company's prices and costs are competitive in comparison with competitors are analyzed using such methods as a value chain analysis and benchmarking. Other methods are also used to study the competitor's products and methods of conducting business that can be compared to the current company under examination.

A value chain analysis consists of examining all activities done in regard to supply chain management, operations, distribution, sales and marketing, delivering, service and supporting the product or service, such as research and development and human resources management. A company's value chain usually consists of primary activities, where most or the value for customers is created; and support activities, which facilitate the performance of the primary activities. A value chain analysis consists of an examination of the combined cost of all activities from the purchase of raw materials to the price paid by the consumer for the finished product. A value chain analysis also compares a company's costs to those of a competitor, using such factors as the internal operations, strategy, approaches used for strategy execution, and the underlying economics involved. The end result of a value chain analysis is that it highlights which internal activities are a cost advantage or cost disadvantage for the company.

After identifying important value chain activities, cost data is broken down into different activities, such as employees payroll, supplies, purchase orders processing, and dispute resolution. Benchmarking consists of conducting a cross-company comparison of how certain activities are performed in connection with the costs associated with those activities. The benefits of benchmarking are that it can be used to examine what method other companies are using to keep… READ MORE

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