Adobe Systems’ Piracy Challenge and Solutions

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Introduction

Adobe Systems is an American technological company that was incepted in 1982. The company has cut a niche in the information technology (IT) industry by specializing in software solutions that can be used with different systems. The company has specialized in the development of digital software solutions that are suitable for professionals. The most noticeable inventions by Adobe are the PDF digital document and the Photoshop application. Adobe is a successful company that has been listed at NASDQ with a share price of $109.03 as at 21^st October 2016 (Bakioglu, 2016). Adobe’s products are unique in nature because the company has invested in an area that is lucrative but with limited competition. However, for a long time, the pricing of its products has been inhibitive to the mass market. The company sells its products at premium prices. The pricing approach locks out the mass market and zeros in on the professional market. Most Adobe’s products are professional software that is used for specific trades.

Identification of Problem, Opportunities, and Symptoms

The primary challenge that Adobe faces is the application of Information technology to curb piracy. The pricing policy has exacerbated the problem. It discriminates many users. By targeting mainly the professionals, the company has ended up neglecting a huge potential market that can buy its products. The high prices that are charged for Adobe’s products have locked out the mass market. The company is facing the problem of losing a potential market to a future entrant or losing revenues to piracy. Many people globally resort to piracy as a way to access software that is not affordable. As a profit making company, Adobe needs to raise share price as part of revenue boosting solution. The company has an opportunity to tap into the growing market that has developed with the spread of information technology. Whereas the potential market sounds sweet to the enterprise, the reality on the ground dictates a different tone. The risk of Adobes products being pirated remains alive thus a great fear of the company.

Statement of the Problem

Adobe Systems faces the challenge of how to roll out its software to the mass market internationally without risking piracy. The situation is a dilemma that the company needs to resolve because the mass market provides a better revenue base that can facilitate the growth of the enterprise. While the professional market is profitable, the company has failed to grow it for the last 20 years leading to stagnation of the value of its shares (Bakioglu, 2016). The company wishes to identify the international regions with high rate of piracy to deal with the problem.

It will enable the business to come up with solutions that can guarantee success. Adobe is a global company that has penetrated numerous regions around the world. The advent of computers and the subsequent spread of Smartphone technology have endeared the company to both professionals and other users. Digital applications that Adobe produces have become signature tools in almost all Smartphones. It leaves the company with the challenge of how to identify global piracy spots and seal the loopholes. A look at the piracy pattern indicates that the trend is not evenly distributed across the globe (Bakioglu, 2016). Some regions are rampant with the problem while some have small levels.

Summary of Alternative Solutions

Stick with the professional market
Mapping the troubled areas
Enhancing the security features of the products
Open up to the mass market

Evaluation of Alternative Solutions

The company can tap into different solutions as it strives to solve the problem.

Stick with the Professional Market

The company can stick with the professional market which has served its interests for a long time. The professional market is small and easy to manage compared to the mass market. However, it has been blamed for the stagnation of the company’s share value. Its growth is insignificant because it is a tiny niche in the technological market. The downside of depending on the professional market is that the company is forced to price its products highly (Sako, 2012). The pricing strategy has the effect of locking out other professionals who are not ready to pay premium prices. The move will also escalate the risk of the products being pirated because they will remain expensive yet popular.

Mapping the Troubled Areas

Different countries have varying levels of law enforcement with regard to piracy and intellectual property infringement. Adobe should map out the various areas as a way to allocate resources to curb piracy. Research indicates that most Asian countries have piracy problems due to weak laws or the government’s lack of commitment to solving the problem (Baird, Miller, Raghu, & Sinha, 2016). In this case, the company will be required to use geographical information systems as a mapping tool. It will enable the company to conduct research on the areas to find out the rate of piracy and determine the extent of the vice. By mapping different areas, the company can manage to come up with a risk analysis report that will allow it to make accurate decisions to solve the problem.

Enhancing the Security Features of the Products

Adobe can improve the safety features of its products as a way to secure them against piracy. It will require the company to invest in research and development to create reliable methods of fighting piracy. The primary challenge to this remedy is that a majority of the experienced hackers can easily unlock any new security system for fun (Bakioglu, 2016). Hackers are unpredictable, and their intentions are varied across the globe. Thus developing a system that is hard to hack requires tremendous effort.

Open up to the Mass Market

The company can have a paradigm shift by opening its products to the mass market. In essence, the change will guarantee that products are made available at affordable prices. The mass market has the advantages of high and quick returns. The high number of Smartphones in the market has enhanced the demand for different types of applications (Sako, 2012). The main problem with this approach is that the company will do a disservice to its loyal clients. The professional market uses this software as part of its occupation, and opening up the software to everyone would result in the professionals losing a lot of customers. Conversely, Adobe will not have solved the fears that led to it targeting only the professionals (Sako, 2012). A price that is deemed affordable in Europe and America may seem expensive in other parts of the world. Thus, changing the prices would still encourage piracy.

Rationale for the Selected Solution

Adobe requires investing in information technology (geographical mapping system) to help it overcome the prevailing problem. The rationale for selecting the application of information technology to map the troubled areas is that it will enable the company to analyze each region with regard to its demographic and market characteristics. It will also enable the company to assess the risk levels in each geographical region that it intends to exploit. Availability of market information is crucial to developing an appropriate approach to each market (Davenport, 2013). Market features are usually unique based on the geographical location. They are derived from people’s cultural beliefs and practices.

Information System Design Proposal

It would be advisable for Adobe Systems to manage the distribution of its products based on information obtained through geographical information system. The company should come up with a system that is water tight to secure its product from piracy. The company will manage to come up with a cost-benefit analysis of markets by mapping out demographic features and economic potential (Hitt, Ireland, & Hoskisson, 2012). The cost-benefit analysis should be the first step before introducing the software to the mass market. An analysis of the economic potential will help Adobe to identify areas that are prospective markets for the product. A huge customer base with an average purchasing power is good enough for any company to exploit.

Geographical mapping of the market will enable the Adobe to develop regional services for the specific areas as a way to meet their demands (Pearlson, Saunders, & Galletta, 2016). Some areas might have a big population but with a low buying power. Such areas are not economically viable for setting up of markets because the products may not sell as expected. Geographic information system is essential for management because it enables a company to develop specific market approaches for individual areas (Hitt et al., 2012). The global market is dynamic. Thus, organizations require understanding the particular area before they decide to invest. The importance of using geographical information system is that it can help to gather statistical information that is vital for decision-making. This recommendation is meant to inform the management about the strength of the chosen model and how it is appropriate Adobe’s strategic plan. The strategic plan of Adobe is to introduce its software to the global market with minimal piracy risks.

Conclusion

Information technology is important for a business because it simplifies decision-making processes. The present business world is very competitive due to globalization. Hence, organizations have to make informed and fast decisions. Failure to identify and exploit opportunities can be detrimental to a business. Working at the global stage is more complicated due to challenges posed by different laws and cultures. The global business arena is lucrative to all companies. However, it has many risks that should be identified and eliminated. It calls for a cautious approach when dealing with the global market. Organizations require having adequate information about a target market before they invest. Due to the elastic nature of the global market, organizations should have up-to-date information about present and possible risks. Investing in information technology can go a long way towards helping Adobe target the global market. The application of geographical mapping system would enable the company to identify the regions that pose significant piracy problems. Eventually, the company would know how to deal with such regions.

References

Baird, A., Miller, C., Raghu, T., & Sinha, R. (2016). Product line extension in consumer software markets in the presence of free alternatives. Information Systems Research, 27(2), 282-301.

Bakioǧlu, B. (2016). The gray zone: Networks of piracy, control and resistance. The Information Society, 32(1), 40-50.

Davenport, T. (2013). Process innovation: Reengineering work through information technology. Harvard: Harvard Business Press.

Hitt, M., Ireland, R., & Hoskisson, R. (2012). Strategic management cases: Competitiveness and globalization. New York: Cengage Learning.

Pearlson, K., Saunders, C., & Galletta, D. (2016). Managing and using information systems, binder ready version: A strategic approach. New York: John Wiley & Sons.

Sako, M. (2012). Business models for strategy and innovation. Communications of the ACM, 55(7), 22-24.

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