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
Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.
supplied at a time and of a quality that meets customer requirements. (30 – 50 words)
Increase production efficiency by consolidation in manufacturing facilities. With a higher production volume, the new AGI might be able to negotiate for lower cost from different suppliers and manufacturers.
Dr. Seuss’ real name is Theodor Seuss Geisel. He was born March 2, 1904, in a small town named Springfield, Massachusetts. His parents were Theodor Robert Geisel and Henrietta Seuss Geisel. He gives his mom credit today for his love of rhymes and being able to rhyme so well. He lived a happy childhood with his parents and his sister and even used some of those memories in his books (Horton hears a Who and I heard it on Mulberry street).
Being acquainted with a mass merchandiser could ruin the company’s image so loyal customers who frequently purchase Fe’nix’s items may start searching for artifacts that are imported through dealers that only sell “authentic” pieces
The company is looking to increase profitability and find a long-term solution to the inventory problem.
Suppliers in the industry seek buyers who can move a lot of merchandise in a short period of time. The threat of substitution is a big deal in this industry. Most retail stores carry the same types of products with little differentiation. This makes it difficult for companies in this industry to keep customers coming back. This places an emphasis on the need to build a good reputation with customers.
Proximity to raw materials gives benefits on distribution channel which is already organized by formers. This also gives an added advantage in reducing transportation costs
is due to the fact that some of their current customers only buy from special sellers.
One of the biggest opportunity that they have as a company that a difference of website stores, they help the society by giving employment, and their need to focus on those people, explore their talents and also go outside the box and make associations with different companies that can became royal costumes.
b. Revamping the firm’s overall value chain to eliminate or bypass some cost-producing activities altogether
To increase sales and diversify in the market, they also have a reasonable pricing policy along with the premium price ranges.
Today, Sorzal Distributors count eleven major players in the artifacts industry that compete directly with them. This number of competitors in addition to others- is a proof that the artifacts business is an attractive industry with low entry barriers (in terms of regulations and capital). In fact, the market of artifacts witnesses different players in terms of nature of their products, scope of business and channels of distribution. These can be importers/distributors, specialty dealers, department stores, amateurs and dealers who sell their products through internet. These competitors display fierce competitive moves ranging from dealing directly with Sorzal's suppliers to selling fake artifacts at exorbitant prices in different locations of the country. (R. Kerin, R. Peterson (2005). Strategic Marketing Problems cases and comments (10th Ed.) In such industry circumstances, Sorzal's initial market segmentation has been blurred. Initially, the company targeted buyers of authentic pieces of artifacts in the United States namely collectors, then responded to its small customers number of gift and decorative items buyers. After the entrance of all these competitors to the market, Sorzal should reconsider
The last alternative could be to create a better marketing about their products, to compare their brand with the competition so the market can understand that the differences between prices is because of the good quality, the brand name, the knowledge, and that they are the only ones, the expert ones on those kind of products.