Ling You Ping, 17838214, C80711,

Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943

Business Capstone 301

Semester 2, 2016
Video Business Case
Report

Name : Ling You Ping

Student ID : 17838214 / 700012689
Industry ID : C80711
Tutor : Mr Azhar Yahya
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
Seminar : Thursday, 8am 10amExecutive
Summary

Adobe Systems Incorporated is a multinational company that operates computer

software business (Fernando 2016). Adobe is experiencing the flat growth in the
business and also the falling of stock prices. The causes of the problem faced by
Adobe are the prices of software are too high and there are high piracy rate of the
software. This report demonstrates the issues and causes that experienced by Adobe,
discuss about the alternatives that used to solve the issues and causes and also deliver
the decision criteria to support those alternatives. Other than that, the recommended
solutions are derived from the alternatives in order to solve the business problems of
Adobe.

Issues

According to the video interview of Stephen Hamill, the main issue of Adobe System
is that the company is currently facing flat growth in the market (Capstone 2016).
This is the biggest issue that they have been faced for 20 years. Besides that, the share
price of the company is falling. One of the goals of business is maximizing the
shareholders values (Tudway and Pascal 2006). The decreasing of share price makes
the shareholders values do not be satisfied. On the other hand, Adobe had a captive
market with only obtain few competitors. The selling prices of the software are set too
high in the market. Therefore this can be one of the underlying issue that causes the
flat growth in the market.

Causes

The main cause of the flat growth is related to the high selling prices of the software.
Based on the statement of Stephen Hamill, Adobe has a great user group. Some of
users tend to buy the technology that provided by Adobe (Capstone 2016). However,
some individuals in the user group cannot afford or do not want to buy their products
due to the high prices. Other than that, the piracy rate of the software is too high.
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
Some unethical people provide services in installing the pirated version of the
software to the users. The pirated software are much cheaper than the original
technology of Adobe ("The Dangers of Buying or Using Pirated Software" 2010).
Therefore, the potential customers of Adobe would prefer to use the pirated version
rather than the original software.

Alternatives

Alternative 1: Market expansion to Asia

One of the alternatives is to expand the market of the Adobe in Asia. Adobe can
expand market to the Asian countries that are developed in entertainment industry
such as Korea, Japan, China, Thailand, and Singapore ("Asia-Pacific Entertainment
and Media Market 2007-2016 | Statistic" 2016). In the entertainment industry, people
may like to use Adobe software to do their jobs. For example, an animation producer
would like to use Adobe Creative Cloud to do the animation production. Besides that,
Adobe can release different languages version of software to those Asian countries
especially Chinese, Korean and Japanese version. The population of China is about 13
billion people. This is also a good point for Adobe to focus on the China market. It
shows that there are more potential users of Adobe software.

Alternative 2: Promote low price strategy

As I mentioned above, the prices of Adobe software is selling too high and potential
users tend not to buy it. In this case, Adobe is suggested to promote low price strategy
in the market. Adobe can come out with attractive packages for the potential users. In
addition, Adobe can produce some low price software for the potential users. For
instance, the media students may like to use the low price software since they cannot
afford the high price software.
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943

Alternative 3: Increase software accessibility

The reason for suggesting this alternative is there are too many software by Adobe
and they are too hard to be accessed. Hence, Adobe can provide workshop for the
users in order for them to learn how to use the software. Furthermore, Adobe can also
work with the primary schools, secondary schools, universities and colleges by
providing teaching courses to the students. The level of accessibility for the schools
can be categorized into 3 levels, easy (primary), medium (secondary) and high
(universities and colleges).

Alternative 4: Launch new product line

Although Adobe is a software company, it can also expand its product line to other
products. By expanding the product line, Adobe can gain the market opportunities
(studioD 2016). For example, Adobe can launch its own digital drawing pad or tablet
together with its existing software to the market. The artists will be the target group in
this market.

Alternative 5: Create high security products

As mentioned by Stephen Hamill, there are high piracy rate of the software.
Therefore, Adobe should produce the high security products or enhance the security
of the existing products by keep on updating them.
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
Alternative Objective Decision Implementation Difficulty
Criteria Cost

Market expansion To create massive usages Penetrate into High 80%

to Asia of the software in Asia. Asian market

Promote low price To create more sales and Products Medium 20%
strategy gain customers loyalty. marketing

Increase software To allow users to access Usage Medium 50%

accessibility the software skilfully. achievement

Launch new To generate new market New market High 50%

product line to the potential and establishment
existing customers
Create high security To eliminate pirated Security High 20%
products version of the software. management
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
Decision Criteria

Decision Criteria Alternative Advantages Relevancies Viability

Penetrate into Asian market Market Increase sales - Analysed by 30%

expansion to of Adobe PESTLE
Asia software -Cultural
Dimension

Products marketing Promote low Increase -Manufactured 90%

price strategy shareholders by Production
value Department
-Promoted by
Marketing
Department
Usage achievement Increase Gain more -Promoted by 80%
software sales and Marketing
accessibility customers Department
loyalty
New market establishment Launch new Increase in -Invented by 30%
product line market price R&D
Department
-Manufactured
by Production
Department
Security Management Create high To eliminate -Invented by 80%
security software piracy R&D
products Department
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
Decision Criteria

Penetrate into Asian Market

Adobe is suggested to use the PESTLE to analyse whether to penetrate into the Asian
market. Below is the PESTLE analysis of a particular country, Malaysia. Under
political factor, the business can be affected by the governments decision on changing
the tax policies, trade tariffs and etc. (Chaudoin 2014). For example, the Malaysian
government is executing the Good and Services Tax (2013 INVESTMENT CLIMATE
STATEMENT: MALAYSIA 2015). This may affect the business if Adobe tends to
expand its market in Malaysia.

In the economic sector, Malaysia is now facing economy downturn. The Malaysia
Ringgit is depreciating (Malaysian Ringgit 2016). Therefore, Adobe should consider
before enter into Malaysia market.

Under social sector, Malaysia is a multicultural country. There are 50.1% Malay,
22.6% Chinese, 11.8% indigenous, 6.7% Indian, 0.7% other, 8.2% non-citizens in
Malaysia ("Malaysia Demographics Profile 2016" 2016). This data shows that
Malaysia can accept different cultures which means Adobe can be easier to enter
Malaysia market.

In technology sector, the Malaysias internet usage is 68.6 % which shows that over
half of the population using internet ("Malaysia Internet Users" 2016). This can be an
advantage for Adobe to develop the market.

In legal sector, Malaysian is protected by the Consumer Protection Act 1999. Adobe
will need to take note of this law when supply the products. Lastly, Malaysia is a
tropical country ("Malaysia Weather, Climate and Geography" 2016). Hence, it is
considered hot and humid throughout the year.

Products marketing

After the production department manufactures the products, marketing department

takes part in promoting the products (Dhar and Sarkar 2013). In this case, Adobe
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
marketing department is responsible to promote the low price strategy products.
However, the marketing plan proposed need to have relevant and good strategies.

Usage achievement

According to alternative 3, Adobe needs to get approval from the schools in order to
promote its products to the students. This need to be considered as whether or not the
schools allow Adobe to intro its software to the students. Some of the schools are
under government operations. Adobe may need to get the permissions from the
governments.

New market establishment

In 21st century, people depend a lot on the new digital technologies (Nicholson 2011).
They are alerted on the trend of digital technologies. Therefore, potential users may be
attracted when Adobe launches a new product line.

Security Management

As mentioned earlier, Adobe has an issue with high piracy of its software. By
launching high security products, Adobe can avoid the occurrence of the pirated
software. On the other hand, Adobe need to enhance its privacy policy in order to
build trust with the customers (Sichtmann 2007).

Ethical Considerations

Business ethics is defined as the morals that need to be achieved in the business
environment (Mawere 2010). Business ethics is very important as it affects the
companys image and reputation (Inglis, Morley and Sammut 2006). The business
ethics that need to be considered in Adobe can be corruption or lobbying and also
privacy problems. As Adobe is an America company, it need to beware of the
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
corruption or lobbying problems when it enter into the market of the foreign
countries. By having this problem, investors may not buy the stock of the company.
Moreover, the company should do well in customers and employees privacy
protection. The business will only grow sustainably when the stakeholders trust the
company.

Recommended Solutions

All of the alternatives help in attracting the potential customers. However, only
Alternative 2, 3, and 5 should be accepted. Alternative 2 is highly suggested to Adobe
which its viability is 90%. This is because the main cause of the flat growth is that the
prices of its software are set too high. To increase the users of its software, Adobe
need to set the prices lower.

Alternative 3 is about increase the accessibility of the software with viability of 80%.
This alternative is also recommended since Adobe wants to increase its sales. It is
worth to mention that this alternative demonstrates that users can come from different
level of education which are primary, secondary, universities and colleges.

Alternative 5 can be used to solve the piracy problems of Adobe. By using alternative
5, trust will be built between Adobe and the customers.

Alternative 1 and 4 should be rejected. This is because these alternatives are

considered long term and huge strategies to be implement. Adobe will need a large
amount of implementation costs such as investment and R&D costs in these
alternatives.

Implementation and implications

Implementation of alternative 2 helps to increase the shareholders values. This makes

the shareholders happy as their wealth are satisfied. Besides that, using the low price
strategy can help to stimulate the market as customers would like to buy the products.
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943
In term of software accessibility, the awareness of the potential customers on the
products will also be increased. Moreover, the products will be well known by a wide
range of age group.

By creating high security products, the piracy problems can be avoided and the
customers loyalty will also increase. After all implementations, the sales of the
software will increase and the share prices will also increase. The portfolio of Adobe
will also grow in positive position.
 Ling You Ping, 17838214, C80711,
Azhar Yahya,
Thursday 8am to 10am,
Total Word Counts: 1943

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Thursday 8am to 10am,
Total Word Counts: 1943
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