Reference no: EM132841927

TERI is a leading provider of enterprise integration software (EIS). EIS allows a firm to connect and integrate processes across all aspects of its business, regardless of where they are located around the world. TERI is a product-focused company, whereas most competitors in its market space, like Oracle, operate as "solutions companies." Oracle and Microsoft have begun to devote considerable resources to the development of and acquisition of products to compete in the EIS space. Despite these recent threats, one benefit of its product-focused strategy is that TERI's proprietary product is generally recognized as being 200% to 300% better than competitors' software. TERI estimates it will take 2 to 3 years for competitors to develop the capabilities needed to bring a competing product to market. TERI invests a considerable percentage of its profits in basic R&D to support its core products. As evidence of this, among its competitors the firm maintains the largest in-house programming staff dedicated solely to the development of advanced enterprise integration software. Installation and related consulting for EIS typically cost between $100 and $200 million, with the TERI software component accounting for about 20% of the installed cost (the remaining 80% is spent on the actual installation, not counting the value of the customer's time). TERI's target market consists of the world's largest manufacturing and industrial firms and it currently enjoys a 60 percent market share.

How sustainable is TERI's competitive advantage?