Grokë, Paul O.||Nelson, J. H. (Professor of business)
M.S. (Master of Science)
Department of Marketing
Computer industry--United States
The purpose of this research was to (1) examine the market potential for American-made minicomputers in Western Europe; (2) determine the adequacy of present overseas distribution methods and associated problems; and (3) propose a more efficient export method particularly suited to those small minicomputer manufacturers who desire greater access to European computer markets. The problems associated with exporting minicomputers to Western Europe are viewed differently by large and small American manufacturers. Solutions are implemented with relative ease by large corporations, but to small companies present an almost impregnable block which excludes them from international markets. To survive in the Seventies, small computer firms must be provided with a method to simplify minicomputer exporting and overseas marketing. To explore such a method, minicomputers and their most common applications were defined. The structure, competitive composition, growth rate of the American and European computer industries and othe export-related problem were examined. A review of present export distribution methods and their advantages and problems served as a background to demonstrate the effects of a newly proposed export distribution method. Periodical and trade newspaper sources were used to more accurately reflect current developments in most all areas discussed in the study. Books, special industry studies and United States Government reports provided background material of a more stable nature in the areas of computer industry structure, forecasts and export marketing methods and experiences. The minicomputer segment of the computer industry has grown at a rapid pace during the past decade, both in the United States and Europe, as have the number of firms involved in the manufacture and sale of minicomputers and their applications. These trends are expected to continue throughout the Seventies. Although the market potential for minicomputers in the American market is great, seven computer firms are responsible for over 75% of all U. S. minicomputer installations. Smaller American-based minicomputer firms must thus look to foreign markets to expand sales or accept limited growth due to intense domestic competition. Western European minicomputer market potential provides significant growth opportunities for such small companies. Demand for American minicomputers in Western Europe will exceed that in the United States by 1974, as a result of the inability of European computer firms to meet local market needs because of a preoccupation with limiting IBM's foreign market dominance, the restraining effects of European computer industry mergers, and the technological gap between America and Europe. Although a number of traditional export distribution methods can be used to take advantage of existing Western European minicomputer market needs, numerous basic drawbacks — high agent commissions, inadequate customer support and feedback, poor equipment maintenance and so forth — make it extremely difficult for small American-based manufacturers to efficiently and profitably expand into foreign markets. Exporting and marketing minicomputers creates additional emotional and financial problems which further discourage small minicomputer firms from seeking markets abroad. As an alternative to the problems presently encountered by such firms, a new export method — the Combined Export Company (CEC)— is proposed. Designed to enable small minicomputer companies to more effectively penetrate Western European markets, it combines numerous costs and services which formerly were assumed by each CEC participant individually, and results in economies of scale in such areas as operations management, marketing research and feedback, personnel selection, equipment modification and customer support. The Combined Export Company will thus aid small American-based computer manufacturers in achieving their primary export marketing objective of providing services and support necessary to gain the confidence of overseas customers, while attracting them at a cost significantly below that of current exporting methods. Ultimately, it will permit small firms to compete on a more equal footing with larger companies during the Seventies, strengthen competition in the Western European minicomputer market and more adequately fulfill the needs of Western European end-users.
Cheetham, Kenneth L., "Potential for change : a study of western European minicomputer markets and distribution methods" (1972). Graduate Research Theses & Dissertations. 4454.
vi, 75 pages
Northern Illinois University
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