Tronn

In: Business and Management

Submitted By margarita
Words 1530
Pages 7
Atlantic Computer needs to make an important decision on the pricing strategy of its new product, the Atlantic Bundle. It is the development of a basic server model called The Tronn. Until now, Atlantic has been recognized, with a 20% of the market share, for the development and distribution of high performance servers. It is estimated that this market segment will keep growing around 3% annually in the next two years. However, with the growth of the Internet, it has become convenient for many companies to acquire a low-end system, and Atlantic wants to penetrate this market segment by the launching of The Tronn. In addition, it is estimated that the market segment for low-end servers will increasingly grow much faster (about 36% annually) than the market segment for high performance servers in the next two years. Nonetheless, since the two described types of servers are totally different and have different functions, they will have different market shares and I believe that there will be no cannibalization.
In order to make a wise decision, it is important for the company to identify not only who the new customers will be but also what their needs are. Companies need a basic computer server that allows them to perform simple, repeatable tasks. To satisfy these needs, Atlantic is considering adding to the Trunn a software tool called PESA (Performance Enhancing Server Accelerator), which would allow the Trunn to perform up to four times faster than a standard basic server. According to the results of an internal performance testing made by Atlantic on July 2000, where the Trunn was run with and without the PESA, it was found that the least complex application servers (file sharing and web servers) performed better with the PESA. For this reason, I consider that Atlantic must introduce the Trunn with the PESA to the new target market (customers in the web-server and…...

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