Iridium Essay

565 Words3 Pages
IRIDIUM CASE STUDY We believe Iridium has one major flaw in the marketing of their global satellite phone system. Iridium did not create a strategic marketing plan at the beginning of the product development process. Iridium started with a perceived problem by management and then developed a solution. When Iridium first started the development of their satellite system, the problem may have been a valid. But the solution took years to develop and the market was never resampled or reevaluated. In the meantime, technology and the consumer found other alternatives to their communication needs, in particular cell phones. We believe that if Iridium had a market orientation instead of a product orientation focus, the company may have realized their solution needed to be revised or cut their losses. This problem was not found out until after 4.5 billion dollars were spent, causing the company to declare bankruptcy nine months after launch. The system did not operate as marketed because all satellites were not deployed. In 1998, the Iridium phone was the size of a brick. At the same time cell phones were being refined and were slightly larger than a current smartphone. If Iridium’s focus was on the elite business traveler, they should have taken a page from Tiffany & Co.’s playbook. They should have realized that the consumer wanted something more than a bulky phone, it would have to be elegantly designed and a fashionable statement. The market size of the elite business traveler that can afford a $3000 phone is very limited, and once saturated, the growth rate would be non-existent. Also, rivals were going to launch their products within months after Iridium, at a dramatically lower cost per minute and cheaper equipment costs. The company only focused on one type of customer, the elite business traveler. They should have thought about what kind of

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