SPC Products Company-

Project Pops

CASE ANALYSIS

SUBMITTED BY: GROUP NO. 5

(DUSHYANT, INDRANJAN, DICKMAX, GAURAV, DEBOJIT)

Q. Was SPC the right customer for Lakshmi’s growth
plan in Japan?

Ans: SPC was definitely the right choice in context to

Lakshmi’s growth plans in Japan as well in context
to its overall growth.
 Reasons

Though Lakshmi was reasonably successful with

European and US based companies, it had only
limited success with Japanese companies.
Japan is the second largest software market in the
world.
By selecting SPC, its main objective is to use SPC’s
story when selling to other Japanese companies.
SPC is well known as a software producer of high
quality, so association with SPC is important for
Lakshmi in this context.
 Reasons

Word-of- mouth is a powerful tool in Japan.

Lakshmi can learn the state-of-the-art technology
from SPC that will give it an edge when it approaches
other companies.
SPC’s data driven project management strengths are
well known and Lakshmi can strengthen themselves
with these technologies through the association.
Q. Did IPT help or hamper Lakshmi’s growth within

SPC?

Ans: The IPT (Indian Project Team)has played a

major role in helping Lakshmi substantiate their
growth within SPC.
 Reasons

It is the IPT of SPC that has outsourced more than

50 small sized projects to Lakshmi
IPT has also helped Lakshmi by recommending and
pressurizing KOS to outsource a large end-user
project to Lakshmi though KOS was reluctant to do
so.
IPT also helped Lakshmi in understanding business
practices and cultures of Japanese companies.
 Reasons

Though there was no consistency in the

specifications and schedules provided by SPC, but
IPT never failed to deliver updated information at
every stage.
Even when Lakshmi quoted US$600,000 for the
project which eventually was too high for SPC, IPT
recommended ways to reduce the quotation.
During the project execution, IPT helped Lakshmi to
make out the important pages for translation which
came as a great help to Lakshmi.
 Customer Profitability

 For Lakshmi, SPC was a customer who was costly to serve but
profitability was high.

 Profitability was high because-

 SPC has been giving business worth a few million dollars every
year to Lakshmi on an assured basis
 Lakshmi saves on marketing costs
 Lakshmi has a guaranteed loading factor from SPC

 SPC was costly to serve because

 Lakshmi had to invest in forming a Japan desk that takes care of
language translation and interpretation requirements.
 It had also invested in Japanese language computers and software.
Customer Relationship and Communication

Lakshmi should form collaborative relationship with

SPC. Lakshmi’s present relationship with SPC is
more of transactional type
Lakshmi is too much dependent on the IPT for all
their transaction and communication purposes.
Lakshmi should try to involve themselves in direct
communication with SPC.
 Major Challenges facing Lakshmi

Language is the major issue in dealing with Japanese

business.
Japanese companies give very vague specifications
and give deadlines that cannot be changed.
Lakshmi’s productivity is expected to match SPC’s
productivity which means 40 to 60% more than
Lakshmi’s base productivity.
 Customer’s responsibilities in the relationship

A relationship orientation must be embedded within

the culture of the customer firm
There should be visibility in terms of information,
knowledge and materials
Aspects upon which collaborative work to be done
should be identified
Should participate with the supplier in making
strategic decisions
Q. Was Lakshmi justified in its costing strategy for the project? What
assumptions did it start with and what was in the customer’s mind?

Ans: Lakshmi was justified in its costing strategy.

 The cost included on-site Japanese costs, idle time cost of

engineers, offshore translational costs, infrastructure costs and
software development costs.

 The customer refused to pay on-site Japanese costs and

translational costs and expected Lakshmi to use KOS’s productivity
figures.
Thank you