Fenix Del Sur Case Study

F Nell del surely is flow rately aced with an hazard to incur a cut with a mass merchandising retailer to snitch their products at 10% below their current prices. The sign would start forbidden with an initial purchase of $750,000 and possibly generate as much as 4 million in sales annually. The dilemma is whether or non the comp all feels that this contract is a good fit strategically. Also of allude is whether or not this opportunity conflicts with the organizational culture. 2 Available Courses of put to death 1 .Accept the contract with the division store This alternative would require triple the amount of facts of lifetion products that the F Unix el convinced(predicate) is producing. One question that F Unix del received should address is, how would this affect the image of the company? Their focus would be much or less taken away from acquiring authentic products and directed towards the replica industry. From the erotica analysis in the appendix, one of Fenn el del Subs strengths Is the ability to produce spirited fibre replicas. This strength aligns well with the opportunity to control 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 tit the department store would not necessarily be a new offering, they are looking to execute market penetration with their real products. The retailer currently sells similar products, and is going to attempt to sell F Unix del certainly as a more exclusive line. This is a market eyeshot strategy In which they are trying to lend oneself the price and quality attribute of positioning to compete.A few questions that need to be asked are 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 unders as well asd by customers to be the real do it, even if they are replicas. Which co mpetitors must be bested to gain the position? -Competitors really similar to F Nell are signing salary contracts with retailers, but pro- vide a mixture of quality of products. F Unix needs to deliver solid quality every(prenominal) metre in order to compete well. Is daemon del received open of holding the position? -F knells success in holding the position leave behind depend on several factors. Can they Increase their volume of replica products to meet the demand? Will current the quality of their decorations stay in the top tier, and can they build brand equity ever time that allows them to retain a sustainable advantage? 2. Create a hoagy brand of products that are interchange in retail stores. Fiend del Sure could create a sub brand of their replica products, which are besides sold in mass merchandising stores.This alternative has several pros and cons. Pros nominate the reputation for quality associated with their products to sell in the retail environment Could utilize a down-market stretch to capture more sales at the dismount 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. slightly potential customers might perceive the company as being too cheap if they sell in these stores. Splitting into two brands may pillow slip conflicts within the company and erode the culture they have worked hard to establish. stream 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 increment 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 that remains unanswere d is can Fiend del Sure keep their current growth with the competitive conditions, and would adding the new contract hurt their sales? Since their current demand is already calling for more replicas to be made, perhaps F Unix del Sure should negotiate with their retailer to obtain a contract that allowed them to sell a dual braded offerings, replicas and genuine artifacts and crafts. They audible sell the brand name as Fiend del Sure Designs This be after would allow them to retain their current plan, and Just retool for increased production.This opportunity could neutralize the threat of a hyper competitive environment that is inevitable. Also, choosing this plan of follow through would allow them to keep their core culture and be honest approximately the source of their offerings. Perhaps their new marketing statement could be For the prod cool elector and interior decorator , Fiend del Sure Designs provides a beautiful rustic look that will I transform any space with real wo rld charm.