Fenix Del Sur Case Study

F Nell del certainly is shortly aced with an opportunity to beat a entreat with a press merchandising seller to mint their products at 10% below their certain prices. The set somewhat would start out with an initial purchase of $750,000 and perchance generate as much as 4 million in sales annually. The dilemma is whether or non the companionship feels that this contract is a unassailable fit strategically. Also of concern is whether or not this opportunity conflicts with the organizational culture. 2 Available Courses of live up to 1 .Accept the contract with the department store This election would require tripling the amount of counterpart products that the F Unix el certain(p) is producing. One scruple that F Unix del reliable should utter is, how would this affect the image of the company? Their focus would be somewhat taken away from acquiring original products and directed towards the replica industry. From the SOOT analysis in the appendix, one of Fennel d el Subs strengths Is the ability to produce naughty step replicas. This strength aligns well with the opportunity to get down the contract with the department store.When evaluating opportunities, It Is good to classify them in terms of the type of strategy employed. Since the contract pinhead the department store would not necessarily be a sassy offering, they atomic number 18 looking to track down market penetration with their existing products. The retailer currently sells similar products, and is going to attempt to sell F Unix del original as a much exclusive line of work. This is a market dress strategy In which they be trying to utilize the price and quality associate of positioning to contest.A few questions that need to be asked argon What is the desired position? -The position is an exclusive line of decorations, priced higher than current offerings by competition. F Unix del Curs products must be understood by customers to be the real deal, even if they be replicas. Which competitors must be bested to come upon the position? -Competitors very similar to F Nell are signing salary contracts with retailers, but pro- vide a categorisation of quality of products. F Unix needs to deliver solid quality incessantlyy time in order to compete well. Is Fiend del sure as shooting capable of holding the position? -F knells success in holding the position go away depend on several factors. Can they augment their volume of replica products to meet the pray? impart current the quality of their decorations stay in the bakshis tier, and can they build brand equity ever time that awards them to retain a sustainable reinforcement? 2. Create a sub brand of products that are sold in retail stores. Fiend del Sure could create a sub brand of their replica products, which are only sold in mass merchandising stores.This alternative has several pros and cons. Pros Evoke the write up for quality associated with their products to sell in the retail environs Could utilize a down-market stretch to capture more sales at the lower end of the market. overall growth of the business could enable Fiend del Sure to have more purchasing power in the authentic market. Cons If replica brand is too good, sales from it my begin to cannibalize the genuine artifacts. Some capability customers might perceive the company as universe too flash if they sell in these stores. dissever into two brands may cause conflicts within the company and erode the culture they have worked hard to establish. afoot(predicate) suppliers may feel undercut by cheap replicas that are sold in retail 3 Recommendation Currently, the gross sales of F Unix del Sure is at $MOM and information indicated that it has been growing its sales by 20% a year from the previous decade. Adding the retail account will increase estimated sales by $MM on top of current growth. With current growth at $MM over the previous decade, $MM would be a 16% increase.The question tha t remains unanswered is can Fiend del Sure concur their current growth with the war-ridden conditions, and would adding the new contract hurt their sales? Since their current demand is already calling for more replicas to be made, perchance F Unix del Sure should negotiate with their retailer to obtain a contract that allowed them to sell a two-fold braded offerings, replicas and genuine artifacts and crafts. They loud sell the brand wee-wee as Fiend del Sure Designs This plan would allow them to retain their current plan, and Just retool for increase production.This opportunity could neutralize the threat of a hyper competitive environment that is inevitable. Also, choosing this plan of action would allow them to keep their core culture and be honest about the source of their offerings. Perhaps their new marketing record could be For the savvy cool elector and inner(a) decorator , Fiend del Sure Designs provides a delightful rustic look that will I transform any space with real world charm.