1. What do you think about the viability of the Jamcracker business model?
Jamcracker was able to identify the market gap and had the advantage of being the first mover. It also concentrated on small & medium business segment and was able to achieve a large customer base. Companies were willing to rent out IT services rather than buying as it was more cost effective. It had created all in one platform for customers or firms by providing single point for access, security, administration etc. This facilitated hassle free transactions while accessing different ASPs. It charged a modest setup fee and charged the customer according to the use of the application which is dynamic and helps in maintaining transparency. The acquisition cost of customers using their direct sales force is proven costly and so firms were moving towards Jamcracker. ASPs cannot meet the economies of scale if they introduce multiple services so they aren’t a competitor and are willing to work in hand with Jamcracker. So currently there is no viable substitute. Also the competitors would take a while to get into the market by which Jamcracker would be an established player. So, the Jamcracker business model is quite viable.
2. What are the critical challenges faced by Jamcracker to stay in business?
Timing issue: The ASP is still an emerging market space. Jamcracker is proposing a new model which people had never exposed to so people weren’t sure whether to adopt the technology. Jamcracker had to make prospective customers aware of the new system in place and its advantages. Technical Challenges: Jamcracker was posed with problem of integration. There was also a challenge of developing the company’s infrastructure to make it more robust as the business grew. As the number of ASPs increases the infrastructure required for maintaining these many connections would be huge. Also there are no defined standards in this market space so integration of ASP was handled by...
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