Case Study: Atlantic Computer

Case Study : Atlantic Computer

1. Executive Summary:

Atlantic Computer is a big manufacturer of servers and high-tech products. It is a market leader in traditional market by providing premier high-end server. Atlantic Computer forecasts a strong growth in basic server market and plans to enter this segment. Atlantic Computer has developed a basic server Tronn and spent huge investment on developing a software PESA which can maximize the server performance up to four times. Atlantic Computer’s main competitor in this basic segment market is Ontario, who has 50% market share with its product Zink. Jowers is responsible for proposing a new pricing strategy for selling Tronn server bundled with PESA before SME trade show.

We recommend to use Value-in-Use pricing strategy for selling basic server by bundling PESA together. After deep analysis by comparing four different pricing options, we found that Value-in-Use strategy is:

• Atlantic Computer will have high profit and quick breakeven point at year 2001
• Cheaper price than competitor’s product by having the equal performance
• Provide customer-oriented solution
• Gain customer loyalty due to customer’s less operational cost
• Share the cost with customers which will help to easily convince the customer

1. What price should Jowers charge DayTraderJournal.Com for the Atlantic bundle (i.e., Tronn Servers + PESA software tool)?

Let’s look at the projected market volumes of basic segment for the next three years. We forecast 5% compound annual sales increase, and 50% attach rate of PESA (half of all the basic servers sold are bundled with PESA):