XYZ Company has been a one-product company focused on developing and marketing a package of innovative enterprise resource planning (ERP) software specialized for law firms and operated in computers running on a proprietary operating system software developed by the company. Customers must purchase both the hardware and software as a bundled package from XYZ Company The company also provides around-the-clock services to ensure that the combined hardware and software system performs reliably, as lawyers are known to be typically disinterested in troubleshooting computer systems. This product-bundling strategy works out well for the company, and the sales revenue of XYZ increases dramatically during its first three years in business.
However, market intelligence shows that new ERP software products are now being introduced by competitors. These new ERP software products are quite capable of performing all of the data processing functions typically required by law firms. Furthermore, these new ERP software products can run on any computer using its existing operating system, thus eliminating the need for customers to purchase dedicated computers.
The president of XYZ Company recognizes the potential threat imposed by these new ERP software products. He wants to know the best counterstrategy he should plan and implement. Design and explain this counterstrategy.