Daktronics Case Solution

Daktronics Case Solution

Daktronics has been one of the pioneers in the electronic signage industry being around for 40+ years. The growth of the company was quite phenomenal in its starting years having hit multiple millions of dollars in sales within its first few years of operation. During the time at which this case is set in 2010, it is seeing a decrease in sales due to the involvement of consultants in the buying process and also increased competition leading to pressure for reducing prices. Also the economy has been sluggish due to recession and there is a lot of underbidding going on and fewer viable projects available.

The main problem that I see regarding Daktronics is, being the pioneer in this industry and having commanded almost 70% of the market for years, they now find it difficult to accept changes that are happening in the marketplace. It is natural for consultants to emerge when they see an opportunity involving millions of dollars in sales and when competition gets high. As in the natural process of the life cycle of any product, the maturity stage is a crucial point in the business. This is when the company will have to accept and respond to changes and if not, decline. So Daktronics is at a time when it needs to increase its Marketing efforts and make sure USP’s need to be highlighted.

I see 2 options going forward:

1. Working with consultants and getting into their good books

2. Deciding to work alone without consultants relying on their 40+ years of track record

The smart thing to do is first deciding that consultants are something the company needs to live with. Few other points are also mentioned below. Regarding consultants, the relationship needs to be mended with them and let them know Daktronics is not trying to take away their business. Working together with them is crucial for getting projects and being what it is, Daktronics can negotiate on very reasonable consultancy fees/ commissions. Certain other things to note are: