George Ilie, Owner
Geoda Systems Inc.
George grew up in a resort town near Bucharest, Romania. He graduated with a B.S. in Industrial Automation and worked in his profession in Romania. When he was a young man George escaped Romania and sought political asylum.
George became a technician for office equipment in Daytona Beach, Florida, and then its service manager. Three years later, George had two children and a wife to support, but only $600 in savings. George boldly launched a competitive business, Geoda Systems Inc., out of a garage. His first client is still loyal after 20 years of steady growth.
SWOT Analysis
Opportunities/Mission
The mission of Geoda Systems is to help small businesses save money on their copies. Its slogan is dedicated to meeting your office needs. George uses his technical skills to calculate the best solution for his clients, gain customer loyalty, and profit from long-term contracts for servicing small business equipment.
Threats/Target Market
Unlike his competitors, George does not recommend a new printer even though he makes less money in the short term. His target market is heavy users of copies such as private school systems, advertising agencies, and other businesses that use at least two reams of paper per month. Currently, George has 450 customers on a service agreement.
Strengths/Specialty
Competitors win government contracts based on low prices for equipment and servicing. Instead of cutting corners, George competes for clients based on the cost per copy. His unique competitive advantage is his strength in diagnosing equipment failures.
Weaknesses/Suppliers
Suppliers provide parts, ink, and used copiers. In 2006, George bought specialized software for managing his business. The software remotely accesses the history of every machine, calculates the life expectancy of each part, dispatches technicians, and handles inventory. For example, the software predicts when a $375 color imager will break down and how much it will cost to repair it. Based on this data, the software sets up a preventative maintenance program.
Marketing Mix Decisions
Products and Services
A monthly service contract alleviates the need to buy a new printer or to buy ink, parts, and other consumables. George buys used copiers after their lease expires, refurbishes them to factory specifications, and resells them as demo models with the same service agreement as a new machine. Three technicians service the office equipment, usually within four hours. George trains the technicians to diagnose malfunctions and fix problems, not symptoms.
Distribution
George does not hire distributors. Most of his new customers are referrals or know George through networking groups such as the Victory Lane Chapter of Business Networking International, the Ormond Beach Chamber, and Executives of Daytona Beach.
Promotion
George does not promote his business with advertising or publicity. Typically, he explains the financial outcomes of various choices and lets the customer make an educated decision. About 70 percent of his customers are repeat business.
Pricing
George provides the lowest cost copies to small business owners in the area. George sells demo models of printers for less than half price even though they meet factory specifications and will last about seven years. The service contract for 2,000 copies per month is $28 or 1.4 cents per copy. Within a year, the client saves about $1800 by avoiding the cost of Ink Jet cartridges. Heavier users enjoy even better savings.
Taking Action
Prospecting
Key prospects for Geoda Systems are heavy users of copies. A direct marketing company could obtain a list of local businesses that are key prospects.
Customer Service
George discounts the service contract for his most profitable customers. When a customer delays payments, the software eventually warns technicians to stop providing supplies and service.
Budgeting
George keeps overhead low and trains technicians to provide preventative maintenance. After buying the software, he was able to streamlined his business and reduce the number of employees.
Action Plan
Geoda Systems continues to be successful because George provides high-quality service contracts for the lowest cost per copy.
What types of small businesses are key prospects for Geoda Systems?