Handspring, Inc: Completing a strategic audit

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ANALYSIS OF THE STRATEGIC FACTORS
The current strategies cannot serve the objectives, there is net loss, which the business is incurring, and the loss has reduced in the current year because the sales have fallen! The company further wants to increase its resources on costly advertising and marketing efforts rather than depend on word of mouth. The development of an operating system to compete with products which are having operating systems of their own is likely to be very costly and lead to further financial losses.
MAJOR FEASIBLE ALTENATIVE STRATEGIES AVAILABLE TO THIS CORPORATION
1. To develop an operating system which would be compatible with microsoft's operating system.
2. To further develop the product so that it is technically superior to that of most of the competitors.
3. To reduce the cost of Treo so that it can compete on the basis of price.
4. To depend on alliances so that Treo is purchased as a tie up products with computers or with other communication devices like the upper end cell phones.
5. To reposition Treo so that it is perceived as a desirable add on to computers rather than a communication device.
6. To focus on institutional purchases by marketing Treo directly to large companies and organizations and target it as a device for improving organizational communication.
COST LEADERSHIP VS DIFFERENTIATION
If Treo is to become the most attractively priced product in the market, then this strategy would be an attractive strategy, however, it would face fierce competition from larger companies who might be willing to take losses to out compete. Even though Compaq which is having the fastest growth in the handheld devices market and its merger with HP making it a formidable competitor does not have a history of incurring losses to compete, the company may cut prices to compete. Palm may not compete on price and this may provide opportunity Handspring to increase its market share. However, cost cutting may require considerable know-how and fine tuning the current production process.

Differentiation in the past has been the hallmark of Hawkins and that has been the secret of success at Palm. Differentiation in Handspring can only be on the basis of technical innovation and increased attention by Hawkins to the technical development of the hand held computer. In short it means more creative genius and more innovative products. Then the first mover advantage will follow. In other words to compete on the basis of differentiation, Hawkins will have to put his brain research on the backburner and concentrate fully on Handspring.

STABILITY, GROWTH AND RETRENCHMENT
There cannot be stability and growth if there are continuing losses. If there every piece of handheld device brings about continuing losses then the company is heading towards closure! Mediocrity will not turnaround Handspring, so all the staff which has not shown exceptional performance should be examined for retrenchment. If there is later a new launch of product then the new employees will be such that they are suitable for the new product.
STRATEGIC ALTERNATIVES

1. To go in for cost reduction measure using technical skills so that the most competitive price with excellent quality can be offered to the customers.
2. To go in for major technical breakthrough so that the product has the first mover advantage and the competitors cannot easily imitate the product. This would require the full attention of Hawkins and for all practical purposes he will have to postpone his current research on brain.

IMPLEMENTATION
To go in for major innovation so that the company can compete on the basis of differentiation. There can be substantial improvements in the product or a device with many more features than the ...