The following paper discusses the case of the Orbital Engine Corporation in terms of its launch of the two stroke engine technology which was revolutionary due to its low emission of pollutants, less noise, the better performance as well as the less complicated working of the machine. The paper highlights the marketing decision of the company which was significantly important and strategic for the adoption of the technology in the automobile industry. These pertained to the third party validation conducted by the company of their technology and the research undertaken by the company on their target market.
The failure of the technology adoption in the automobile market however was imminent due to the lack of credibility of the Australian innovations and the region of original the company. This helps us establish that aside form the apparent advantages of the product it is also important for the company to have a credible image as well as a well established and supported background on which the new technology and products can be trusted by the clients and the target market. This is especially true for pioneering companies with new technology.
Introduction Orbital Engine Corporation is a company which specializes in manufacturing innovative two stroke engines which are much more suited to the market for automotive parts and combustion technology based vehicles. “Orbital Corporation Limited is an international developer of engine and related technologies. The company provides research, design, development and testing services to many of the world's powertrain producers, regulatory authorities and research institutions.
” (‘About Orbital Overview’)The Orbital Engine Corporation was commences by Ralph Sarich an inventor and engineer who modified the combustion engine technology in the 70s and came up with the two stroke engine which was very similar in design and functionality to the rotary engine but was much less complicated, expensive and better performing. The company was initiated in 1973 in Australia and since then has been striving to establish the orbital engine technology in the automotive industry market.
However over the period of years, the company has diversified its focus to include alternative combustion engine based vehicles and machines as well. The following paper provides information on the Orbital Engine Corporation and analyzes the marketing decisions and activities that were undertaken by the company in order to establish it in the market. Aside from this the paper also focuses on highlighting the failure of the adoption of the two stroke engine while discussing the reasons behind the failure.
The lessons learned form marketing strategies employed by the company are also presented Wise Marketing Decisions The wise marketing decisions that were undertaken by the Orbital Engine Corporation for attaining the objective of getting major car makers in the US to adopt the new technology based two stroke engines includes the decision of the company to arrange for third party, authorized automotive testing for their engines.
These tests were comprehensive and exhaustive arranged by outsourced third parties having a reputable position in the automotive industry and aimed and providing the automotive industry giants with proof of the durability and the reliability of the orbital two stroke engine as an engine that could be used in vehicles and automobiles with success. Moreover these tests also aimed at illustrating the automotive companies as to how the performance of the matched the claims of the Orbital Engine Corporation and verified the mechanical durability of the engine.
Aside form this it also illustrated how the engine was much better at controlling and reducing emissions as compared to other two and four stroke engines. The benefits of getting the technology verified by a third party in this case for emissions included financial benefits in terms of participating in emission trading schemes, while providing a degree of credibility for the reporting of information and the claims being made by the company.
Aside from this it also provides for integrity, transparency, consistency, as well as reliability in the technology (‘Green House Gas Emissions’, 2008). The other wise decision that was taken by the company in order to attain the contract from the major car manufacturers pertaining to the adoption of the new engine related to the applying negotiating strategies and understanding their customers before pursuing them with their product propositions.
The company of Orbital Engine Corporation undertook extensive research in terms of getting to know the automobile industry giants, their business and the people running these businesses. By undertaking such measures, the company was able to gather information about their prospective clients and the target marketing terms of what their requirements were, what problems they were facing and how thy would react to the proposition of the two stroke engine technology put forward by the Orbital Engine Corporation.
Other important and good decision for marketing the two stroke engine by the company pertained to testing the engines limited number of cars manufactures d by the target market of the company including the Porsche and the Ford cars. This provided the clients of the company with an actual demonstration of how effective the engines were in the real environment specific to their cars. Failure of Engine Adoption In short the orbital engine technology in a two stroke engine provided the benefits of a less polluting and better performing engine was a revolutionary technology.
“The Orbital Engine Co discovered that the sophisticated fuel-injection and combustion system developed for the orbital engine could be used on two-stroke engines, making them much more powerful, fuel-efficient and clean. The Orbital Combustion Process engine has been refined into a two-stroke engine that is 50% lighter, 30% more fuel efficient, 20% cheaper to make, 70% smaller, and produces 30% less pollution than traditional engines.
” (Orbital Engine Technology, 1995) The technology however faced significant hardships in terms of marketing itself to the automotive market for adoption of the technology. This was mostly because of the reasons that the company of Orbital Engine Corporation was basically an innovation and technology driven company with little or no experience in dealing with clients, specifically the shrewd ones like the large automotive giants in the industry. This put the company at a disadvantage in terms of marketing its product to the customers.
Aside from this the despite having significant benefits pertaining to being cost effective, providing low level of emissions and better performance levels, the technology was failure in terms of adoption by the automotive companies as the production of the product required extensive change and customization to the plant and the process. Moreover the Australian industry suffered form lack of credibility for technology as the local market it self assumed that the local innovators could never come up with technology which could rival or better than the technology invented by overseas manufactures.
This hindered the progression and the adoption of the two stroke orbital engine. Aside from this the new technology of initiated by an Australian company was highly doubtful and presented uncertainty for the international automotive giants. It. presented the automotive market industry giants with high risk in terms of increased uncertainty due to the innovative yet new nature of the idea. This led to a conservative approach being taken by the automotive market players in terms of adopting the two stoke orbital engine to replace the rotating engines being use at the time. Marketing Lessons Learned
As it was depicted in the case that the Orbital Engine Corporation sought aggressively to attract the attention of the automotive industry giants to adopt the technology for the two stroke orbital engine, however the reputation of the Australian innovations and innovators as well as the perceptions of the, local industry placed the company in a relatively negative position when it came to technology adoption. The company as a result was forced to diversify its focus and technology orientation and utilization in other fields pertaining to combustible engine based motors, and marine outboard motors.
This provided the company with an outlet to use the revolutionary technology to be used in an industry which was open to technology innovation and adoption of new ideas. The other markets in which the Orbital Engine Company was able to diversify into and introduce the usage and effectiveness of its product included the motorcycle industry the scooter industry as well as the personal water craft and industrial utility industries. Aside form this gardening tool and echolike manufacturers also adopted the much better and cost effective technology of two stroke engines by Orbital Engine Corporation for their garden equipment applications.
The company was therefore able to apply its two stroke engine technology the non automotive sector as well as the automotive sector. This provided the company with a safer and less risky portfolio as well as helped the company provide verification and evidence of the diverse functionality of the engine to the automotive sector. “Intra-industry diversification promises three sets of benefits, which, separately and in combination, provide firms with a competitive advantage: synergies arising from economies of scope: premiums from mutual forbearance enabled by multi-market competition: and efficiencies derived from market structuring.
” (Stan & Greenwood, 2004) This integrated with the development and the sighing off of the OCP based vehicles in Australia provided a practical demonstration of the adaptability and the innovative nature of the product as well as its dynamicity. The other lessons that are leant from the case of the Orbital Engine Corporation include that the perceptions of the market as well as the positioning of the company and its origin is very important and crucial for the success of its products and deal proposition.
This is supported by the failure of the OEC engines technology in the automotive sector despite the engines having the required benefits and the properties in demand by the automobile industry. Conclusion The case of the Orbital Engine Corporation is a very complex one which depicts that even when companies undertake extensive measures to establish themselves and establish credibility in their products, the reputation of the place of origin of the company, their technology and the perception and opinion of their local industry can have profound effect on the companies success.
The Orbital Engine Corporation has been able to establish and successfully market it self in the diverse makes pertaining to combustive engine based vehicles and machines but their entrance into the automotive industry was hindered greatly by their lack of experience in the industry and the perceptions about their local industry.
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