Quantum vs Seagate

Executive Summary

Quantum Corporation (Quantum), a rival company of Seagate Technologies (Seagate), is providing 8 inch disc drive to its customers who are mainly mainframe users and mid-range computer users. Some marketing surveys reveal that most of its customers seem to want more capacity in their disk drive and not smaller drives. Quantum is reacting to this demand by introducing a higher capacity 8 inch disk drive.

In order to compete with Quantum, Seagate needs to make decision whether to introduce a higher capacity 8 inch hard drive or develop a new 5.25 inch disk drive. Also, personal desktop market is currently untapped and Seagate has an option to provide their disk drives in desktop computers manufactured by Apple, a startup company. But it is currently unclear how many people are going to use personal desktops.

If you were Seagate, would you introduce a 5.25 inch drive? Estimate pricing, market share,

And profitability at introduction, after 1, 2, 4, 6, and 7 years.

We would recommend to Seagate to introduce the 5.25 inch drive. This product offers a great opportunity for the company to encroach the existing market from the low-end that is not being appropriately exploded by Quantum or any other competitors in the markets.

The approach that Mr. Forward and Mr. Stallwart took was a correct one, they not only consider the current customers of the eight inches technology that has been dominated by Quantum, but also they explore the preference of a new market niche, the personal computer users. The failure to recognize the new trend could position Seagate in a “me too” company position with little relevance in the data storage industry.

When comparing the 5.25” drive with the 8” drive from Quantum, its flat slope suggests that the product has a broad appeal, appealing to all customers in a more similar fashion. In addition, Apple Inc. represents a great opportunity since it’s exploding the new personal desktop computers market, which requires a...