Iomega Corporation Data Storage

The purpose of this report is to examine the Iomega Corporation, establish in Roy, Utah, for the BA 201 subject of Business course at Birmingham-S come forthhern College. The telephoner manufactures calculating machine computer retentivity devices the goose eggTM and JazTM reasons, the Clik memory board device, and the BuzTM audio and video drive. 1The leading supplier of data storage devices in Europe, and the third largest supplier in the world, Iomega has now strengthened its reap of harvestings with the Ditto tape backup device.2 The industrys enthusiasm and commonplace satisfaction with which these products were received is unprecedented in the computer industry, making Iomega an trailblazer among innovators.This report impart discuss the following dowrys of the Iomega CorporationHistory of the pot and its productsMarketing strategies and product offeringsIomega was founded in 1980 with its flagship removable storage device, the Bernoulli drive. Though its authe ntic efforts atomic number 18 now much than antiquated, Bernoulli Optical Systems remains a infantryman of Iomega. In 1983 Iomega was made public, and for the next twelve social classs, the company would see a period of experimentation and growth. While Iomega remained behind the major industry name of Apple and IBM, the tardily eightsomeies and archeozoic nineties were integral to Iomegas current advantage. The practiced bases for the Zip and Jaz drives were built upon, leading to these products 1995 release.2Public result to the release of the portable data storage devices was rattling(a). Orders clogged the production component of Iomega before the disks were even released to the public, and by April 1996, barely one year afterwards its introduction, Sony Pictures Entertainment entered into an exclusive agreement with Iomega for substance abuse of its Jaz disks.3 June of that same year would exploit even greater response Iomega entered into selling agreements wit h IBM, NEC Technologies, Gateway, and Unisys.4 By the leftoer of the summer of 1996, Iomega had formed partnerships with every major computer manufacturer in the United States.The media frenzy surrounding the release of the drives was further fueled by honors awarded by computing magazines PC Computing and widget Guru. The Jaz drive was named 1996&8243s Innovation of the Year and Most Valuable Product by PC. Gadget Guru named the Jaz drive the Best Computer Accessory of 1996. These and other accolades pushed public familiarity of Iomega products high and higher, boosting production and sales.5In response to this domestic success, Iomega began a complete enlargement of its foreign production and merchandise in early 1997. European r block offer were set up in both the Netherlands and Switzerland, and their production site in Malaysia was expanded and modified. While the base of the company remained in Roy, Utah, Iomegas forepart in both Europe and Asia was fortified with a lar ger reduce of production jobs for Asians and Europeans. Coupled with a greater concentration of foreign commercializeing and advertising, Iomega emerged as the third largest producer of data storage devices in the world.6The end of the 1996 monetary year showed a 272% attach in revenue from the prior year.7 The introduction of the Jaz and Zip drives in 1995 was undoubtedly responsible for this success, which was followed in 1997 by pertly partnerships with Motorola, Apple, Kinkos, and Hewlett Packard.4 By June of 1997, Iomegas Zip drive shipments reached six one thousand million it was then a standard in spic-and-span Sony personal computers, micron notebook computers, and in both Kinkos store computers nationwide.8The success of the Iomega drives remained rearing when the company announced the introduction of the Buz mul cadencedia producer in late 1997. The Buz producer would completelyow consumers to capture movies, music, and photographs on their personal computers. While the success of the Buz drive still remains far behind that of the Zip and Jaz drives, this diversification allowed the company to remain on the racetrackting edge of computer engineering. The Jaz drive was marketed as a companion piece to the Buz drive, lightly forcing consumers to purchase dickens products with one goal in mind.9 The undertake was successful, leading to 1997 fiscal year earnings of 77%.10May 1998, in the wake of the Buz release, brought about another(prenominal) important computer modernization, the Clik drive. The Clik drive revolutionized methods by which consumers could store digital training from handheld video cameras, computers, and cameras.11 Marketed with special Clik disks, the drive itself brought the portable storage efforts of Iomega full circle, now having storage products for virtually every major computer product on the market.Iomega advertises in many another(prenominal) different places. The tissue site www.iomega.com provides a simpl e way to find out about the company. It provides potential customers with many different sections geared towards answering their questions about Iomega and its products. The site allows potential customers the probability to gather information through press releases and news articles related to the company, and gives customers a chance to win free products in contests. More importantly, Iomegas web site allows customers the opportunity to order its products online via a virtual shopping mall. Customers female genital organ receive Iomegas products without ever stepping foot outside their front door.Iomega too advertises its products through other companies. Having Iomega Zip drives already installed in computers, such(prenominal) as Apple, Dell, and Gateway, allows customers the option of buying a Zip drive already installed in a computer of a well-established personal computer (PC) manufacturer. About 40% of Dell computers already concord Iomega Zip drives installed in them.Due to all of the positive responses Iomega has received from forming partnerships with these PC manufacturers, it has decided to form a new partnership with fujifilm. Fuji Photo Film Company Ltd. has recently started marketing signed Clik disks. Fuji already markets Fujifilm branded Zip drives and has now sign with the forty megabyte Clik disks. Said Steven A. Solomon, senior vice president of Fuji Photo Film USA, Inc., Weve had great success branding Iomegas popular Zip disks and we believe that we will have similar success with Clik disks. 12Iomega offers customers a way to store large amounts of information on disks rather than save them on the hard drive of their computer. The company offers 100MB Zip USB and now the new 250MB Zip drives. This option benefits both businesses and personal computer owners. Businesses profit from owning a Zip drive due to the convenience of saving large presentations or proposals on a disk and then carrying it to different places for personal com puter owners, the Zip drive allows everyone in the house to have their own disk, guardianship childrens games separate from parents finances. The notebook Zip gives pile with digital computers the ability to carry large amounts of information with them in a slim, low power design for easier storage and transportation.Iomega recently lowered the equipment casualty on their external Zip 100MB SCSI and their 100MB Zip USB the new prices are $99.95 and $129.95, respectively. Reducing the prices was driven by the products universal adoption by the users of more than twenty-two million Zip drives, said David J. Henry, vice-president and ecumenical manager of Zip/Jaz management at Iomega Corporation. 14 By big(p) the price of the product, Iomega makes their products more affordable for their customers, attracting more potential buyers.Iomega Corporation announced in January 1999 that it is comfortructuring in hopes of change magnitude gross profit figures for the upcoming fiscal ye ar. Although Iomega controls over 86% of the removable storage market, its gross profits have decreased to levels that have made public graceors somewhat weary. Previously, Iomegas construction was that of three decentralized product units which included the Professional Products, Personal Storage, and fluent Storage divisions.The new structure will focus on eight business functions that include sales and marketing, product development, manufacturing and operations, integrated marketing, finance, legal, human resources, and corporate development and strategy. In addition, top management created a new in operation(p) group known as customer service and development which combines the animate customer service organization with a new group of applications engineers.15 Iomega hopes that these changes will ease the rise-fall-and-rise-again impression that the company has acquired since its entry into the removable storage market in 1980, thus spurring improved gross profits, consume r confidence, and an increase enkindle on Wall lane.16In 1983, Iomega was on top of the Wall Street world. The searing property raised $21.7 million in public offerings due to the liaison drawn by IBM PC users who were amazed by Iomegas secure Bernoulli stroke technology. The Bernoulli Box used a subsystem with stand-alone disk drives that rest beneath the monitor and provide unlimited data storage electrical capacity with removable cartridges. After several eld of prosperity, the bottom fell out in 1986 and 1987 when computer makers began including relatively large storage hard drives as a standard part of the home PC. Demand for the Bernoulli Box technology waned, and Iomega experienced hard times that included an $8.5 million bank debt and enormous inventories.Michael Kucha took the reins as chief executive officer ( chief executive officer) and immediately made an invasion on the struggling company. Kucha cut costs by trimming the work force from 1,350 to 750 as well as utilizing substantial tax write-offs. In less(prenominal) then a year, Kucha helped Iomega gain an $18 million cash balance, cut the bank debt to zero, and slashed inventory by 50%.16 More importantly, Kucha accent research and development during his leadership reign. The company was able to adapt its Bernoulli Box product for the Apple Macintosh computers and began benefiting from the increased demand for the Macintosh in the late 1980&8243s and early 1990&8243s.After a few years of slightly above average success, 1993 proved to be a sinister year for Iomega. CEO Fred Wenniger, who replaced Kucha in 1989, departed due to shrinking margins and increased competition. The removable storage market had recently been flooded with Iomega clones that caused prices to decline, thus increasing competition. Analysts wondered if the company would survive the year.17 Leon Staciokas was named acting CEO as the company structured during 1993 and 1994.In January 1994, Staciokas advocated a staf f cut in hopes of reducing overhead expenses and spill up extra cash. Eight percent of compensated positions were cut as part of the corporate wide restructuring.18 Later in the year, Kim Edwards replaced Staciokas and became permanent CEO of Iomega. Edwards first task was freeing up more money to invest in updating and improving technology. In July, Iomega cut 100 salaried jobs in a bold management move that would free up $4 million in overhead annually.19Edwards new management approach towards Iomega eventually transformed the company from a struggling business into the nigh successful removable storage manufacturer in the world. This approach was based on the idea of creating a product that the public would buy and use rather than simply admire. After meeting with top management and technical advisors in the early months of 1995, Edwards was able to lay the groundwork for the release of Iomegas new Zip drive that would revolutionize the industry and reestablish the company as a major player in removable storage software. The creation and release of the Zip drive in late 1995, as well as wise financial management by Edwards, helped to increase Iomegas operating budget from $141 million in 1995 to just over $1.2 billion in 1997. 20Unfortunately, Iomega encountered more problems in late 1997 and early 1998. Edwards believed that opening a new product engineering and manufacturing plant in Milipitas, California, would yield greater productivity and allow for quicker response time to customer demands for new technology.21 And it did. However, in July 1998, Iomega acquired Nomai, another removable storage manufacturer, in hopes of shrinking competition and placing the company squarely in front of all competitors. This bold move hurt Iomegas finances and caused a earthshaking increase in operating expenses when paired with the upkeep of a brand new factory. This poor management decision by Edwards cost him his job. 22Presently, Jodie Glore serves as president and CEO of Iomega. Mr. Glore is the permanent replacement for Kim Edwards after crowd Sierk served a brief stint as interim CEO. Glore hopes to reorganize and restructure Iomega he wants to focus on the areas that the company has been criticized for in the past such as customer service and unsatisfactory product performance. Glore has already interpreted steps to alleviate these problems by ordering internal restructuring that will die the previous system. The new system of eight business functions is a more elaborate, yet organized hierarchy. Glore hopes that it will allow a quicker response to customers, placing their needs as a top priority.15