Enterprise Systems Drive Corporate Strategy for a Small Business

Enterprise Systems Drive Corporate Strategy for a Small Business

Materials Handling Equipment Corporation (MHE) is a small business that sells a commodity.  Their commodity is that of forklifts, cranes, and similar machinery.  Recently, the company faced economic challenges from a dwindling market due to the increase of larger companies moving into their market space.  The increase in competition resulted in MHE reducing their prices, which caused lower revenue streams.  As a result, MHE was forced to look at new ways to differentiate itself from the competition.  Though reluctant at first, MHE looked into SAP’s Business One ERP system, which proved to be a good decision (ZantekSAP, 2012).

SAP’s Business One ERP system reduced MHE’s costs, increased revenues, and offered a new service. As a result, the new service gave them their own Market Niche in asset management and more enhanced tools for their clients.  One of those tools was a portal, which allowed MHE’s clients to view their assets.  The portals allowed customers to manage their assets in a new way by providing the service and resource of maintaining their assets under one roof.  This new service allowed MHE to expand their current sales platform to a sales, service, and information-based platform (ZantekSAP, 2012). 

How will MHE continue to differentiate themselves from the competition?  Eventually, MHE’s competitors will enter the market offering a similar service.   

As Kirk Landers mentions in a brief article   

First, there is the profit motive.  Even though the field can catch up quickly, a manufacturer can parlay a breakthrough design into a premium price in the short term and establish a strong market share for the long term (Landers, 2000).

Given MHE’s market niche and product differentiation, they can remain profitable by growing a larger long-term market share then that of its competition.  

References:

Landers, K. (2000, Aug). Product Differentiation. Construction Equipment .

Laudon, K. C., & Laudon, J. P. (2014). Management Information Systems (13th Edition 

ed.). (S. Wall, & B. Horan, Eds.) Upper Saddle River, NJ, USA: Pearson.

Laudon, K. C., & Laudon, J. P. (2013). Chapter 3, Case 2 Materials Handling Equipment   Corp: Enterprise Systems Drive Corporate Strategy for a Small Business. 13 , 13.             (S. Wall, B. Horan, & A. Bradbury, Eds.) Pearson.

ZantekSAP. (2012, July 26). www.youtube.com. Retrieved January 22, 2015, from

https://www.youtube.com/watch?v=iIIeze6i90Y