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Technology Stocks : RomTech (Nasdaq: ROMT) -- Ignore unavailable to you. Want to Upgrade?

To: Pat W. who wrote (8)	10/26/1997 6:19:00 PM
From: MENSO	Respond to of 427

What do you think of the company's business strategy ? Personally I can't help but love a company that not only has the vision to prepare a thorough and far-reaching business plan, but also has the ability to word it intellegently. The last earnings release appears to indicate that the company's implementation of their business plan is in fact going well, wouldn't you say ? BUSINESS STRATEGY The worldwide market of personal computer users in the home and small office represents the primary market for the Company's products. A March 1996 study estimated the total United States installed base for home personal computers at forty-seven million units during 1996 and projected the installed base to grow to sixty-nine million units by 1999. The Company believes that brand name recognition of its products, developing new brands and capitalizing upon the success of top selling titles in existing brands is critical to its success as a software publisher. The Company's business strategy is to be a leading publisher of high-quality, value-priced consumer software by offering products in the game, Galaxy of Games, and productivity, Galaxy of Home Office Help, segments of the market for under $15 and the education/reference and lifestyle, Galaxy Deluxe, segments of the market for $19.95. To implement its business strategy, the Company intends to execute the following tactics: Rely On Consumer Research and Marketplace Data. The Company utilizes consumer research and marketplace sales data to determine which products are achieving favorable sales results in the consumer software categories that the Company serves. The Company then focuses on its top selling products that have a sustainable product life and which also appeal to the broadest age group of consumers regardless of gender. The Company then either develops or procures similar products that meet these criteria while complementing and supporting the Company's branding strategy. Deliver Products To Market Quickly To Maximize Sales Opportunities. The Company believes that one of its significant competitive strengths, primarily as a result of its direct selling activity at weekend computer trade shows, is its ability to identify products that consumers are buying and which they will continue to buy. The Company leverages this competitive strength by quickly developing or procuring a product offering that the Company believes will achieve favorable sales results in its category when the product is combined with the Company's attractive, distinctive and informative packaging that is designed to encourage impulse purchases in retail stores. The Company's development efforts focus primarily on product design, features, consistent and user friendly interfaces, ease of use, product quality and consistency. The Company's internal product development activities are supplemented by utilizing existing technologies and externally developed programming and content. The Company maintains control over the creative and market-driven aspects of its product development activities while utilizing outside resources to reduce its development costs and minimize risks. Develop Products That Are Simple To Use. Based on information from registration cards returned by buyers of the Company's products, a large portion of the Company's customers are new computer owners and so the installation and use of the Company's products must require only a minimum of technical expertise. The Company provides technical support for all of the products that it sells and revises or upgrades products in response to consumer feedback gained from consumers' registration of products they have purchased. Develop Efficient Distribution Relationships. The Company intends to rely on larger, well established, merchandising and distribution organizations to distribute its products to retailers in the U.S. and international markets. Developing a direct sales force and a distribution organization to serve today's U.S. retailers and retailers worldwide requires a commitment of considerable financial and managerial resources and entails significant competitive risk. In order to reduce the resources required for effective distribution, the Company intends to incorporate Internet capabilities into many of its new products. Customers or prospective customers can then review the Company's products at its website, (http://www.romt.com), and download trial versions of selected software. Market Brand Names That Deliver Consistent Quality. The Company is currently focusing its marketing resources on developing brands that represent consistency, quality and value to the consumer. The Company believes that to the consumer, brands offer a safe and secure choice in an otherwise confusing, fast changing and often intimidating software marketplace. Consumers view successful brand logos as friendly marks of quality assurance. Once a consumer becomes highly satisfied with a brand in any given product category, that consumer will typically tend to actively seek out that brand versus competing brands. The Company believes that successful brands can often command premium prices relative to other competitive products and one of the Company's goals is to achieve such success with its branding strategy. Achieve and Maintain Profitable Operations. Since its inception the Company has not achieved profitability. During the second half of fiscal 1997 the Company undertook changes in its operations and business strategy to focus on the value priced segment of the consumer software market while structuring the Company to achieve profitability. The value priced segment is currently the largest and most rapidly growing category of the consumer software market. This trend is expected to continue for the foreseeable future as consumers demand lower prices for software. In order to achieve and maintain profitable operations the Company has developed plans and systems that will focus on: Delivering top selling branded titles with predictable, controllable development costs and risks; outsourcing production and warehousing while achieving high quality, low product costs, timely and efficient deliveries and predictable overhead costs during periods of rapid and high sales volume growth; and controlling operating expenses.