Case Scenario 2: ERP Inc

question 61

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) Valuable
• B) Rare
• C) Costly-to-imitate
• D) None of these would change

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Definitions:

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A type of dietary fiber that does not dissolve in water, aids in digestive health by adding bulk to the stool and promoting regular bowel movements.

Lentils

Edible seeds from the legume family, known for their lens shape and used in various cuisines worldwide as a source of protein and nutrients.

Continuous Open System

A system that operates unceasingly with exchanges of matter or energy between the system and its surroundings.

Tube-feeding Set

A collection of supplies and equipment used to deliver liquid nutrition directly into the stomach or intestine through a tube, for patients who are unable to eat by mouth.