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• W1566493952 abstract "CASE DESCRIPTION The primary subject matter of this case is product differentiation in a relatively price-competitive market. In particular, this case highlights different elements that business owners use to differentiate their products, especially when they face constraints in bringing their business costs down, which prevents them from engaging in direct, price competition. This case has a difficulty level of three and up, appropriate for junior level and beyond. The case is designed to be taught in two to three class hours in a management, managerial economics, or an entrepreneurship course, and is expected to require about three hours of outside preparation for students, consisting mainly of reading the case and familiarizing themselves with the business environments on the U.S. territory of Guam in the Western Pacific region. CASE SYNOPSIS The case is about Isla Training Center, a strategic business unit of the Guam-based small business named Tax Shelter, Inc. that provides training services in computer applications. The case traces through the creation of the Isla Training Center in response to a request for proposal from a U.S. Federal agency and the business decisions that had to be made when Federal funding was terminated. Consequently, Isla had to reorient its business operation from originally serving a captive market of public sector clientele to entering a relatively competitive market of private sector customers. As such, Isla had to differentiate itself from its competitors by focusing on its better quality products and customer service, which is tantamount to transforming itself to a monopolistically competitive firm. INTRODUCTION The Tax Shelter, Inc. is a small accounting firm offering accounting and tax preparation services and business consulting services since 2000. It is located on Guam, a U.S. territory in the Western Pacific. It is a customer-oriented organization that focuses on its clients' needs in the accounting and finance and plays a consultant role to help its clients to achieve their specific goals. It has three Strategic Business Units: tax preparation, business consulting, and computer training services. This case focuses on the creation of its computer training services unit, Isla Training Center. The business owners' decision to open Isla Training Center (Isla, henceforth) was made in 2006 in response to a Request for Proposal (RFP) advertised by a government agency. It was going to serve the training needs of those employed in the government sector. The Tax Shelter submitted a proposal and was awarded a contract for six months. The contract expired the end of 2006 and another RFP was in process for the subsequent fiscal year. A new contract was signed in June 2007 but deemed illegal due to improper procurement procedures made by the government agency. This resulted in delays in the contract process, a waiting period during which Isla continued to incur fixed costs. It was at this time that the owners of Isla had to reorient its business operation from originally serving a captive market of public sector clientele to entering a relatively competitive market of private sector customers. BUSINESS ENVIRONMENT Market Overview Computer training services is a developing market on Guam. Even though the industry's growth rate has not been surveyed, the increasing competitors prove that the market is growing. The market started off in the tourism sector where tourism businesses focused on its employees' computer literacy as a way to improve its customer service and to attract affluent tourists to visit Guam. Since then, other businesses and government agencies followed suit and began focusing on hiring well-educated and skilled employees. Consequently, the demand for training programs has increased. Meanwhile, to enter the market of computer training services does not require strong backgrounds or support, such as huge capital or high technology. …" @default.
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• W1566493952 date "2009-12-15" @default.
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• W1566493952 title "Isla Training Center: Product Differentiation in a Price-Competitive Market" @default.
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