Introduction
Company’s description
FalconStor is a company that provides data storage and storage visualization solutions which was founded in New York by two Computer Associates veterans Reijane Huai and Wayne Lam. Since then it has experienced several name transformation before it finally arrived at the current name.
It is one of the fastest growing technology companies in China and has managed to market its products all over the world. “It offers software such as File Interface Deduplication System, Network Storage Server, Virtual Tape Library, and Continuous Data Protector all of which allows for remote office protection and disaster recovery because Wide Area Network backs them optimized replication” (H. R., & Reddy, 2010, p 115).
Legal environment
The most basic legal environment of every business is usually governed by the state, country and international. These involves goods which can be manufactured or sold, how customers and employees should be treated , financial and taxation laws among other rules and regulation revolving around ethics in business world as well as those that guide on how a person should seek legal justice in case a dispute arises in the course of doing business.
In terms of electromagnetic compatibility that is the ability of electronic devices to work harmoniously with the electronic environment. The company’s products marketed both locally and in other countries are designed in such a way that they meet the required standard. All the software are confirmed and approved by the regulatory agency and they have a guarantee that installation in any device will not bring any harm. In terms of products safety all the products are usually tested before they are dispatched to the customers. All the products also come with safety information printed on them or leaflets that contain detailed information on safety.
Falconstor has always been dedicated to pay tax in its home country and other countries where it distributes its products. These laws always vary from one country to but the finance team has been working to ensure that proper financial audit is done and published in national newspaper to ensure there is transparency for profits that the company earns and that the right amount of tax is paid to the government. Recently, FalconStor modified its corporate structure of some of its subsidiaries so as to ensure that there is global integration of its operations and that there is efficiency in paying tax.
Social Environment
FalconStor is one of the few companies which has demonstrated social responsibility that business is not just about getting money but it goes beyond to include addressing social concerns for instance, addressing environmental concerns, genders issues, and respect for cultural diversity. “In terms of environmentalism, the company has received several awards for reviewing its policies to ensure there is a provision for recycling of products” (H. R., & Reddy, 2010, p 104).
The customers worn out products either are bought back or are recycled for the customer at a lower fee. This move tremendously reduced all the companies’ devices, which were being dumped thereby avoiding environmental hazards. The other step was elimination of harmful chemicals such as polyvinyl chloride and Brominates Flames Retardants, which are commonly used in this industry in manufacture of a range of products. These materials may be cheap but in the end, they have serious environmental implications because they may cause fire related injuries. Checking at the company’s latest products launched, they all aim to reduce energy consumption.
Another critical aspect is diversity in the workplace. The current program of the corporate on diversity goes beyond traditional form of diversity of considering sex and culture. They include sexual orientation, religion, and national origin. All the staff is considered equal regardless of their individual differences or uniqueness from other staff.
The company always seeks to develop personal skills of the workforce to improve the skills of the weaker staff and motivate the skilled staff to do more. If it is placed in the scale of affirmative action that is legalizing the standard for companies to ensure that a specific number of members of certain ethnic groups, it can successfully pass the test. “This is because the company has always ensured that everyone is given equal opportunities as in education and employment” (Pickle, & Abrahamson, 2006, p 25).
The economic environment
Falconstor works in a highly competitive environment with large corporate organization as well as generic competitors. From the report of 2007 Fiscal year, the management formulated and implemented a transformational strategy that sought to introduce new products in the market, increase service delivery, improvement of customer relation, restructuring customer segments into a global world and regulation of operating expenses. At the end of 2008 it was clear that this strategy was working well to give the company a competitive advantage. Over the last few years, it has been working to maintain the strategy as well as capitalizing on growth opportunities and with that it has gained a double digit economic growth.
In the course of 2009, Falconstor experienced challenging information technology as well as market demand deteriorating economic conditions. This was caused by a number of factors surrounding decline in customer spending behavior due to rising cost of energy, political issues, increased unemployment, and solvency of some businesses and rising cost of credit. The company then rose again in 2010 with focus on large enterprise, public sector, small and medium businesses. The changing economic situation has not deterred it from going for its main goal.
Management Structure
FalconStor Software Company is headed by the president who also a chief executive officer, bearing the top most management role followed by the vice presidents of different departments. James p. McNeil is currently the president having assumed that role in January 2011. The main objective of the CEO is to establish the company to top in the data protection answers. He is entitled to advocate fairness and transparency in the management systems of the company.
This company is made up of a number of departments each headed by a distinct vice president. Bernie wu join the company in 2000 and is now the vice president of a department concern with the business development. He is in charge of the global OEM, Technology partnership and reseller. “The vice president (Bob Daly) of research and development department is responsible in ensuring proper development is take place and delivery of data protection mechanism or technologies and solution” (Pickle, & Abrahamson, 2006, p. 117).
Global services and support vice president (Gil Arbel) is the one responsible for globe technical service and all the support operation for instance training and education. Louis j Petrucelly is the chief financial officer and treasurer for Falconstor Software Company. He is in charge of the transaction of the company that is maintains the book-keeping etc. A general manager and vice president of sales and marketing function, is to supervise all the activities throughout EMEA.
“Seth Horowitz is currently the vice president, general counsel and secretary, prior to assuming this position he was in new view technologies. All the vice president of different departments in this company gives first data information to the president to facilitate easy decision making in the firm” (Sen, 2008, p.106).
Financial issues
FalconStor Software Corporation, a famously renowned supplier of disk oriented data management and protection solutions recently announced the financial performance for its third quarter which ended in September 30th 2012.
The total revenues or returns for the third quarter period of the year 2012 were as at 17.1 $ compared to $ 18.9 million for the exact period one year ago. This reflected a decline of approximately 9 % in total revenues generated by the company. However, the total returns for the third quarter period of the same year 2012 showed a significant increase of about 4 % in comparison to the second quarter of the same year 2012.
The generally low and underperformance of the software corporation can be largely be attributed to the global recession which largely contributed to the weakening of the global economy. This greatly reduced the spending of many global organizations on software products and general I.T infrastructure. As a result, there was a general reduction in business confidence and considerable market risks and uncertainties. This resulted in reduced investment in the global computer technology and I.T sector thus the reduced expected revenues for the third quarter of the year 2012.
Despite the fact that the anticipated revenues fell short of the company’s expectations, the company still managed to secure some substantial revenue growth during a highly challenging macro economic conditions. Major uncertainties that currently surround the global market place for computer technology continues to disrupt the company’s operations.
The existing challenges that greatly affects the computer technology sector mainly includes the prolonged sales cycles as a result of reduces purchases, major budget cuts and freezes that mainly aims at reducing expenditures and in most instances lost deals as a result of unfriendly sales strategies and competitive pricing from the major market competitors.
The impact of potential change factors
“Some of the potential change factors include technology progress, emergence of new trends and new distribution channel, cost variation of company structure and the market size among others” (Sen, 2008, p. 57).
Technological progress, this takes into account the technical support that provides courteous and prompt services to customers. This may create a smooth troubleshooting of answering questions from the customers based in regards to the product and services offered. It also impacts on backups ,for instance, advancement of Falcon Star back up speed from the current of 800% with automated server-less backup to a better enhanced one through technology hence making the service and product delivery constant and reliable.
Emergence of new trends and new distribution channel of the products and services, emergence of new distribution channel in the industry can offer the better opportunity to develop a competitive benefit against the competitors in the market since it creates a way to enhance sales outcomes from the potential buyers in the market against that of the competitors.
Cost variation of industry structure, used to identify other key factors of success, as a factor is helpful in strategy formulation to develop a beneficial competition in the market. For example, the experience curve effect mostly used to develop a cost advantage over market competitors for the company. Research shows when production volumes doubles, the cost added fall by given constant number of percentage.
“Variation in market size usually identified through the market potential and volume in which sale volume is realized in total, therefore making the volume dependent on consumer quantity and demands. Therefore, it makes market price and quantity a necessary factor to be accounted” (Sen, 2008, p. 77).
On other hand market volume is highly vital, since it defines the limits of demands and takes into consideration the potential clients. This relation creates chances of growth in the market.
References
Ananthan, B. R., Appannaiah, H. R., & Reddy, P. N. (2010). Business management (Rev. ed.). Mumbai [India: Himalaya Pub. House.
Pickle, H. B., & Abrahamson, R. L. (2006). Small business management. New York: Wiley.
Sen, M. (2008). Business management. Jaipur, India: Oxford Book Co.
