Case Scenario 2: ERP Inc

question 92

Multiple Choice

Case Scenario 2: ERP Inc.
ERPI is a leading provider of enterprise integration software (EIS) . EIS allows a firm to connect and integrate processes across all aspects of its business, regardless of where they are located around the world. ERPI is a product-focused company, whereas most competitors in its market space, like Oracle, operate as "solutions companies." Oracle and Microsoft have begun to devote considerable resources to the development of and acquisition of products to compete in the EIS space. Despite these recent threats, one benefit of its product-focused strategy is that ERPI's proprietary product is generally recognized as being 200% to 300% better than competitors' software. ERPI estimates it will take 2 to 3 years for competitors to develop the capabilities needed to bring a competing product to market. ERPI invests a considerable percentage of its profits in basic R&D to support its core products. As evidence of this, among its competitors the firm maintains the largest in-house programming staff dedicated solely to the development of advanced enterprise integration software. Installation and related consulting for EIS typically cost between $100 and $200 million, with the ERPI software component accounting for about 20% of the installed cost (the remaining 80% is spent on the actual installation, not counting the value of the customer's time) . ERPI's target market consists of the world's largest manufacturing and industrial firms and it currently enjoys a 60 percent market share.
-(Refer to Case Scenario 2) If the time for the competitor to produce a product similar to ERPI's were 2-3 months instead of 2-3 years, which portion of your assessment of ERPI's capabilities would change?

• A) Value
• B) Rarity
• C) Costly to imitate
• D) None of these would change

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Definitions:

Function Arguments Dialog Box

A graphical interface in software applications that allows users to enter and configure the parameters required by a function to operate.

Page Layout View

A view mode in word processing and spreadsheet software that displays the document as it would appear in the printed output, including pages, margins, and headers/footers.

Scaling

The process of increasing or decreasing the size of an object or image in proportion.

Zoom Percentage

A feature that allows users to enlarge or reduce the size of content on screen for better visibility or to fit more content on the screen.