Terracog Global Positioning Systems (Gps): Conflict and Communication on Project Aerial

Problem Frame

At the summer 2006, a competitor of TerraCog, Posthaste produced a new GPS prototype BirdsI, which can display satellite photographs. In October 2006, Posthaste launched BirdsI as “the only handheld GPS with satellite imagery” at that time, and it was priced at a reasonable $400. Managers in TerraCog expected BirdsI would not be popular after a certain period of time. However, the demand of a GPS with satellite imagery kept increasing by spring 2007. TerraCog had started losing competitiveness and market share to Posthaste by the success of BirdsI. Moreover, TerraCog had not yet decided whether they should introduce a similar product, namely “Aerial”, to the market. If they do, the price of Aerial was estimated at $475, which would be much more expensive than that of BirdsI. Ed Pryor, the Vice President (VP) of Sales, urged to reduced the price, but the Production team and the Design & Development team could not agreed to keep the retailed price lower than $475.

Problem Analysis

All of the management departments were not optimistic about Project Aerial. Emma Richardson, the Executive Vice President could not find a way to get all parties to reach a conclusion on the price point for Aerial. Allen Roth, Director of Design & Department, was worried about the new GPS could not maintain the same functionality and speed. Ed Pryor urged to reduce the cost of Aerial. There was no one who was willing to solve the problem or taking risks towards reducing the cost at the desired level. If the top executives are not doing well, the teams in lower hierarchy could hardly be successful.1

The product development team was unenthusiastic about Project Aerial. The team members explained that time was not sufficient for redesigning of the total platform. Further, there were several other new ideas that could capitalize on growth in cycling and fitness GPS applications by TerraCog. Team members could not find a way to express ideas and they were forced to work on...