STRATEGIC ISSUES AND PROBLEMS
Myron Rangard, national sales manager, and David Olsen, Director of Procurement at Fe nix Del Sur LLC have been assigned the task of reviewing a pending contract with a mass-merchandising department store that would entail the tripling of replica production, and more particularly a full assortment of authentic items. Rangard and Olsen must first consider the long-standing reputation that Fe nix del Sur has built as being one of the most reputable sources of genuine and authentic artifacts. Presently, replica production represents only a small portion of total sales and increasing their replica production could jeopardize their reputation. In addition, acquiring authentic artifacts is more difficult due…show more content… 1. Attempt to stay in the current niche that they are in, providing quality, authentic artifacts to high-end specialty designers, decorators, and select exclusive department stores. 2. Redirect their efforts and change to a more focused and heightened manufacturing and distribution strategy that answers the demand of the current marketplace and promises real hope of growth and profit in the short term and in the future.
#1 Advantages: • Maintain their reputation of providing authentic and quality product(s) • Cornering the genuine artifact market by focusing all time and resources into this particular area • Maintain current pricing and even elevate future pricing due to the exclusive nature of their items
#1 Disadvantages: • Increased market competition in distribution and retail sales • Governmental restrictions on acquiring authentic artifacts • Internet competition • Loss of profits
#2 Advantages: • Provide the consumer’s demands with quality replica items and secure a strong foothold in the current market environment • Eliminate tedious and capital consuming issues related to governmental restrictions • Eliminate costs related to additional buyers that will not be needed in a more production centered operation • Initial