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Essay / Research Paper Abstract
This 3 page paper uses a case study to describe the way in which Lotus Corporation launched its Lotus 1-2-3. It further considers whether Lotus should sell directly to its large accounts, or go through its network of distributors.
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3 pages (~225 words per page)
File: D0_HVLot123.rtf
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case study of Lotus, and makes suggests as to what they should do with regard to distribution and servicing their accounts. Discussion The case study talks about the launch of
Lotus 1-2-3, which changed the way software manufacturers brought out their products. At the time Lotus started up, most software developers were quite literally the guy working out of his
bedroom or in his parents basement. Barriers to entry were low and thousands of individual entrepreneurs brought their systems to the market, which was small and "highly fragmented" (Case study,
1994). But Lotus was able to secure venture capital, and used over $1 million of it on an advertising "blitz" to introduce its spreadsheet, Lotus 1-2-3 (Case study, 1994). Lotuss
efforts had several effects. First, its advertising and marketing push "expanded the market and greatly raised entry hurdles in the industry" (Case study, 1994). It meant that anyone who wanted
to introduce a new product and "be heard above the crowd" had to adopt a Lotus-style launch (Case study, 1994). Lotus felt this type of hype was necessary "to get
distributors and dealers to carry a product, to get the computer magazines to review it, and to generate crucial word-of-mouth referrals" (Case study, 1994). Not coincidentally, it also made Lotus
the leader in the application software sector (Case study, 1994). Lotus believed that it had three entirely separate market segments: "large corporate users and medium and small business users"; to
that we can add individuals (Case study, 1994). For a long time Lotus sold its products through distributors, then it began to sell directly to its larger clients (Case study,
1994). That put it in the position of indirectly competing against itself; the distributors were angry and finally forced the company to stop this practice. Now this is precisely the
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