Strategy and Management in the Term Paper

Excerpt from Term Paper :

This system has the ease of being used in any lighthouse irrespective of its current lighting and power systems. Due to this, Vega is the sole company in the world having such advanced technological and optical competencies. Through the system, all the beacons installed can be monitored from a central location, thereby reducing the quantity of false call outs and identifying faults which require manual attention.

Considering the Total Cost of Ownership -- TCO Vega's product offer a low TCO as their IT products recover the average cost of $30,000 for installation since it reduces the $1,250 per hour helicopter-assisted maintenance. The computer-managed systems have to be fail-proof as any type of false call could cost up to $3,500. This system manufactured by Vega uses the interactive technology capable of permitting technicians to switch lights on or off from a remote location. Vega enjoys economies of scale as it has been in the business spanning nearly three decades. Due to this, the technology used by Vega would take substantial time to duplicate. The market of navigation lights has a high entry barrier as the initial capital costs are very high and the market size is small, hence competitors will not find profitable to enter this business. Apart from that the present development and level of innovation at Vega has rendered Vega's products more and more popular among its customers and more intricate to duplicate and compete with.

Generating and evaluating alternative solutions:

Lighthouses have been around since ages and some dates back to the 19th century. As an alternative solution, the strategy at Vega has been that its product has to be compatible with a broad range of instruments. The VegaMAC, which is computer-controlled beacon, has been designed to be compatible with various technologies like weather reporting instruments, tidal and temperature gauges and to efficiently evaluate their performances, together with the performance of the lighthouse. Another recent alternative solution has been Vega's development of the Light Emitting Diode -- LED beacon that has been successful in creating another core product line. The new LED beacon which is a product of the latest technology is such smaller compared to its earlier versions thereby permitting Vega to develop a capability having mass production. Sensitivity regarding the market is required to be transformed, to make the buyers in order to generate greater awareness of the potential benefit of the product. As regards the price line, Vega although enjoying a market leadership status has never exploited its position to charge a premium price for its product which it could easily has done so.

But, on the contrary it has been sensitive on the price front and has met the market perceptions. The Marketing Manager Martyn Cook who expressed has translated this into practice that people will not be prepared to pay more than a specific price for a buoy lantern despite it having considerable economic advantages. On more alternative approach at Vega has been ethical in business dealings and even going to the extreme of recommending a competitor's product in case it is able to offer a better solution to the problem of the customer. The method creates a number of problem out of which keeping the rest of the market honest is the answer. With the education that Vega gives to its customers, they in their turn mount the pressure on the competitors to stay honest.


Vega's important contract till date has been the development and production of a major lighthouse beacon meant for the U.S. Coast Guard which was implemented. The beacon was required to fulfill the meticulous needs of being solar powered, generating a signal visible from 26Nm, at 1 rotation per minute through the use of a bulb not more than 250 watts. This system was needed to be operational automatically for at least 12 months. Another major project which Vega implemented was providing the sector lights for the Terneuzen locks in Belgium to enable massive ships using this channel to align themselves and approach the canal which sometime lets just a clearance of one meter on either side of the 40-metre wide lock. The year 1993 was one of the most significant years in its 20-year history.

US Coast Guard -- USCG bought VRB-25 Landmark Beacon Lighthouses to the USCG who was pleased to offer more orders. In 1994 another implementation on the part of Vega was the supply of special signal lights to the Port of Hong Kong that comprised of remote and monitoring interfaces. The popularity of Vega's products has been due to the changes across the industry that has come about through replacement of the use of the manned lighthouses. This changeover has given Vega with an escalating potential market. This has resulted in substantial savings in maintenance costs. Its PEL Sector Light has been so popular to be the light manufacturer against which every other supplier is measured.

Effective Communication:

The effectiveness of communication was better within the company. In the words of Marketing Manager, Martyn Cook, whenever he suggested anything to his Managing Director, John Rochfort, he never declined it and accepted it wholeheartedly. In doing so, he was able to perform it not only competently, but within the budget and time constraints. Besides due to the lean structure of the organization of just 20 people, makes the communication within the organization better. Apart from the formal communication channel, Vega has also kept its ear to the ground for keeping a track on the informal channel. After launching the LED beacon, John Rochfort heard through the grapevine that several people were doubtful as regards the functionality of the beacon. But as Vega had a strong product in their hands they were confident of its success.


1. Physics and Engineering Laboratory (PEL) Sector Light. Sector Light is a projection light that displays a different color when viewed from different angles at sea. The precision of PFL Sector are such that a complete color change at the sector boundary happens over an angl of less than 1 minute (0.02 degrees). This corresponds to a lateral distance of merely 1 metre at a viewing distance of 3.5 kms. Apart from that the intensity is maintained right to the edge of the beam and does not reduce the further the observer is distanced from the axis.

2. The Vega PEL Sector Light was first of all developed for the particular problems connected with the Porirua Harbor wherein two lights we having difficulty in alignment as a cliff at Goa point lacked physical space to put the rear light in a 2-station 'alignment' system. Sector lighting technology dispatches only a single light beam, however this changes color depending upon whether a ship is too far left (red) on track (white) or too far right (green).

3. CNC (Computer Numerical Controlled) machine tools - lathes and milling machines perform speedily and accurately and with perfect repeatability. Vega procured the first machine during the mid-1990 to…

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