Customer and Dow Corning Essay

679 Words Oct 27th, 2013 3 Pages
Xiameter

1. What factors, internal or external, were responsible for Dow Corning’s poor performance between 1995 and 2001 as show in case Exhibit 3?

Externally, Market was changing. Down Corning kept on losing customers to low-price suppliers. 1) Big global and regional rivals were increasing their efficiency of supply chain to provide lower cost to the customers. 2) Small local players with no R&D costs and low overhead were offering a range of commodity silicone products to bulk customers at low price. 3) The commoditization trend was also denting Dow Conning’s financial performance.

Internally, Dow Corning didn’t change its business and marketing strategies accordingly. 1) Dow corning’s traditional strengths were in innovative
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Or, should Xiameter drop its low-price positioning and compete on other benefits including product quality, simplicity, reliability, etc.?
Xiameter positioned itself as a web-based provider of quality products at market driven price and on time delivery without other tech service to those customers who seek for low price, purchase large quantities and require no services. Its products included 350 common silicon products.

Currently, the competitors offer on-line services which include full range of products, on time delivery, without minimum purchasing quantity requirement and on line discussions with specialists to the customers.

The risks it will bring to Xiameter are that 1) they offer more products choices to the customers; 2) no minimum purchasing quantity; 3) real time delivery. 4) More convenient when there’s a specialist to be on line. It may increase some costs though, however, as long as they can reach an economic scale and increase their supply chain efficiency, they can be a threat to both Xiameter and Dow Corning brand.

As Xiameter was targeting on the segment who seek for low price, it will be risk for Xiameter to change its value proposition at this moment to product quality, simplicity and reliability only. In that way, Xiameter will be hardly differentiate itself from the competitors and may cannibalize Dow Corning’s business.

b) Should Xiameter “let the customers decide” by expanding its limited

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