GLO-BUS: Developing Winning Competitive Strategies

GLO-BUS Developing Winning Competitive Strategies pleasant to GLO-BUS. You and your co-managers ar taking over the operation of a digital photographic tv television photographic tv tv tv television photographic camera follow that is in a neck-and-neck race for spherical commercialise leadership, competing against meet digital camera companies. All digital camera get alongrs presently reserve the same worldwide trade sh be, although shares vary by companion across the quadruplet market countrys Europe-Africa, Asia-Pacific, Latin the States, and North America. Currently, your bon ton is divvy uping closing curtain to 800,000 entry level cameras and 200,000 multi-featured cameras annuall(a)y.Prior year revenues were $206 million and net earnings were $20 million, equal to $2. 00 per share of common gun dividing line of business. The play along is in sound financial condition, is performing advantageously, and its products are well regarded by digital camera givers. Your associations board of directors has charged you and your co-managers with developing a winning private-enterprise(a), trade system, genius that capitalizes on growing consumer interest in digital cameras, observes the company on the ranks of the industry leaders, and boosts the companys earnings year afterward year.Some Background Information Your company began operations five years ago and prevails its head billet in Lisle, Illinos,USA. It assembles all of its cameras at a modern initiation in Ha Noi, Vietnam and ships them directly to cameras sellers (multi-store set up that shop electronics products, local anesthetic anaesthetic camera shops, and on pedigree electronics firms) located in Europe-Africa, Asia-Pacific, Latin America, and North America.The company maintains regional gross gross revenue offices in Milan, Italy Singapore Sao Paulo, Brazil and Toronto, Canada to handle the companys sales and promotion efforts in individually geographica l region and help persist the merchandising efforts of area retailers who stocktaking the companys brand. Retailers endeavor to maintain fertile inventories of camera models in their own stores and warehouses to satisfy shopper imply. Seasonal outturn and Seasonal Demand. Camera demand is seasonal with about 20 pct of consumer demand coming in apiece of the commencement three quarters of each calendar year and 40 percent coming during the quaternary quarter holiday season.Retailers place orders for digital cameras roughly 90 geezerhood in advance of judgeed sales, so as to collect ample numbers on hand to satisfy camera buyer demand in the future quarter. Thus, during Quarter 1 they place orders for the cameras they expect to sell in Quarter 2 during Quarter 2 they place orders for the cameras they expect to sell in Quarter 3, during Quarter 3, they place orders for the cameras they expect to sell in the peak holiday season fourth quarter and in Quarter 4 they order the number of cameras they expect to sell in Quarter 1 of the following year.Assembly and Shipping. The company has a staff of plurality engaged in new product R&D, engineering, and design this convention has the capability to develop new and improved camera models as tell by top management. Once co-managers settle on the desired specifications and executing features for the companys line-up of camera models, the needed parts and components are vexed from suppliers having the capabilities to make deliveries to the companys Ha Noi assembly plant on a just-in-time root.Cameras are assembled by four-person product assembly teams at well fit out workstations. Shipping department personnel ready retailers orders for dispatch and stack them on the loading dock for pickup by self-directed freight carriers. The cameras are delivered anywhere from 3 days to 3 weeks later, depending on a retailers location and the means of transportation. The cost of case the cameras, packaging them for shipment, and freight averages $3 per camera. Many countries curb import duties on cameras.Import duties in each of the four geographic regions currently average $5 for entry-level cameras and $10 for multi-featured cameras. Import duties are subject to change in upcoming years. Competitive Efforts. To capitalize on advances in digital technology and keep its cameras appealing to consumers, the company from-time-to-time introduces new and improved models, adds mental process features, restyles its camera bodies or housings, and upgrades the internal camera software.Aside from company efforts to make its cameras lines appealing and rivalrous with those of partake companies, the companys sales volume and standing in the grocery store is affected by the outlays at which it sells its cameras to retail dealers, advertising expenditures, the number of retail dealers it is able to attract to canalize its brand, the number and length of quarterly promotions, the size of it of the price discounts offered to retailers during these promotions, the length of the indorsement periods on its cameras, brand image and reputation, and the bore of the technical support provided to its digital camera users.Stock Listings. The companys stock is publicly traded on the NASDAQ exchange in the United States and on several(prenominal) other(a) stock exchanges. The closing price in Year 5 was $30 per share. The companys financial statements are prepared in accord with generally accepted beting principles and are reported in U. S. dollars. The companys financial accounting is in accord with the rules and regulations of all authorities where its stock is traded.The World merchandise for digital Cameras The industry your company competes in consists of 4 companies. All companies are on an equal primer coat from a global perspective, but on that point is one essential rest in the competitive positions of the rival companies the percentage of cameras being sold in the four geographic regions (Europe-Africa, Asia-Pacific, Latin America, and North America) are not selfsame(a) from company-to-company as followsPercentages of Company Sales Volume in (unit sales) North America Europe-Africa Asia-Pacific Latin America Your Company 40% 30% 20% 10% competition A 10% 40% 30% 20% Competitor B 20% 10% 40% 30% Competitor C 30% 20% 10% 40%In effect, each company presently has a strong market position in one region, intermediate market positions in two regions, and a weak market position in one region. So there are market share differences among the companies in the industry within each geographic region of the world camera market. In upcoming years, company managers can assay actions to alter their sales and market shares in all regions, opting to increase sales and share in some and to decrease sales and share in others. Market Growth.The global market for digital cameras is communicate to grow 8-10% per annum for the next five years (Years 6-10) and then t o grow at a slower 4-6% annual rate during the following five years (Years 11-15). These intercommunicate growth rates apply to all four geographic regions and to twain entry-level and multi-featured cameras. However, in any one year, the growth rate in each region can deviate from the 9% average for Years 6-10 and the 5% average for Years 11-15 by as much as 1% in either direction, with different size deviations for each region. The same goes for the projected growth rates for entry-level and multi-featured digital cameras.Hence, there is an element of uncertainty surround just where within the 8-10% range and the 4-6% range the growth rate for a particular year will actually fall, for either a attached geographic region or a particular type of camera. Ratings of digital Camera Performance and Quality. The World Digital Camera Federation, a well respected affiliation of camera industry trade groups and camera experts, tests the operation and quality of the camera models of all competitors and assigns a performance-quality or P/Q evaluation of 1 to 5 stars to each companys entry-level camera line and multi-featured camera line.Currently, both the entry-level and multi-featured camera lines of all competitors have a 3 star P/Q rating. Spirited competition among rivals is, however, likely to result in different P/Q ratings in the forthcoming years. Digital Camera Retailers. Worldwide, there are some 50,000 retailers of digital cameras scattered across the world each of the four major geographic regions of the world market has 12,500 retailers, some of which are multi-store retail chains (100 per region), online electronic retailers (400 per region), and local camera shops (12,000 per region).Retailers with store locations that in like manner sell cameras on their websites are not included in the online category. Multi-store chains account for the biggest percentage of entry-level camera sales, with online retailers second local camera shops account for the biggest share of multi-featured digital camera sales, with online retailers second. Retail markups over the wholesale prices of digital camera makers run 50% to 100% thus an entry-level digital camera wholesaling for $160 could retail for $300 or more than than and a multi-featured camera wholesaling for $360 might carry a retail list price of $700.Such markups give birth retailers the latitude to put digital cameras on sale from time-to-time at 10% to 20% off regular price and still make a decent proceeds margin. Retailers typically carry anywhere from 2-4 brands of digital cameras and stock only certain models of the brands they do carry, but in all four geographic markets there are around 20 full-line camera retailers that stock most all brands and models. Chain store retailers are drawn to carry the best selling brands and mainly stock entry-level cameras.The makers of weak selling camera brands have difficulty convincing major retail chains to chip in display space to th eir models. Local camera shops and online retailers are, however, more amenable to stocking and promoting low-volume brands, particularly those with above average P/Q ratings and respected brand images. Local camera shops and online electronics retailers devote much of their merchandising effort to multi-featured digital cameras because of their bigger profit margins.In the multi-featured camera segment, local camera shops enjoy an advantage over online retailers because legion(predicate) multi-featured camera shoppers prefer to touch and try out the functioning of the multi-featured cameras they are considering and seek out the opinions of camera savvy personnel in local camera shops before finalizing their purchase. In choosing which brands of multi-featured cameras to carry and feature in their local ads, local camera shop owners put a fairly intelligent weight on P/Q ratings, warranties, brand image, and the number, length, and price discounts of manufactures promotional disc ounts.Online retailers use essentially the same criteria in deciding which multi-featured camera brands to give top-billing and research priority on their websites. Digital Camera Buyers. Digital camera shoppers are generally quite knowledgeable many do extensive earnings research to educate themselves about the features, performance, and prices of competing digital camera brands and models. The World Digital Camera Federations much publicized P/Q atings are trusted by camera shoppers its frequently visited website has detailed information concerning the results of its performance tests and the basis for its P/Q ratings of each camera brand. Both camera makers and online electronics retailers have extensive information on their websites about currently available models. legion(predicate) websites and publications review new and improved camera models as they are introduced by manufactures.The buyers of entry-level digital cameras are considerably more price sensitive than multi-f eatured camera buyers and many do comparison shopping on price in selecting which brand to purchase. The purchasers of multi-featured cameras are much more particular about camera performance and picture quality. Many price sensitive consumers shopping for their first digital camera are inclined to wait to make a purchase until electronic retailers have special sales promotions and offer entry-level camera models at sizable discounts off the regular retail price.It is common for camera retailers to also have special sales promotions for overstocked multi-featured models. The Competitive Factors That Drive Market Share Competition among rival camera makers centers around 11 sales determining factors How each companys wholesale selling price (for both entry-level and multi-featured cameras) compares against the corresponding industry-wide average price in each geographic region. P/Q ratings. The number of special promotions each quarter. The length of the special quarterly promoti ons (in weeks). The size of the discounts off the regular wholesale price during these promotions. Advertising expenditures. mathematical product selection, as measured by the number of models in each line of cameras (entry-level and multi-featured). The number of retailers carrying the companys brand. The length of the manufacturers warranty period. The ease with which users of a companys digital cameras can obtain responsive technical support when they encounter difficulties. Brand reputation among buyers and retailers.With these 11 competitive determinants of sales and market share in play in each camera segment in each geographic region, you and your co-managers have many options for crafting a dodging capable of producing good profits and increase on investment and keeping your company in contention for global market leadership. For example, you can Employ a low-cost leadership strategy and heed a competitive advantage keyed to having lower be and selling your digit al cameras at lower prices than rivals. Employ a preeminence strategy that sets your companys digital cameras apart from rival brands ground on such attributes as a higher P/Q rating, more models/styles to select from, and such marketing attributes as more advertising, longer warranties, more promotions, better technical support for owners of your digital cameras, or a bigger network of retail outlets carrying the companys brand. Employ a more value for the money strategy (providing 4-star digital cameras at lower prices than other 4-star brands) where your competitive advantage is an ability to incorporate appealing attributes at a lower cost than rivals. Focus your strategic efforts on being the piss market leader in either entry-level or multi-featured cameras. Focus your companys competitive efforts on gaining sales and market share in those geographic markets where your company already has high sales and deemphasize sales in those areas where your company has a comparably low market share or where profit margins are relatively low. Pursue essentially the same strategy worldwide or else have regional strategies tailored to match the differing competitive conditions and actions in North America, Europe-Africa, Asia-Pacific, and Latin America. Focus your companys competitive efforts on those regional markets where sales are highest or most moneymaking and either deemphasize or withdraw from one or more geographic areas where market share is low and/or profit margins are small. sentiment Strategically The Importance of Trying to Out-Maneuver Rivals Making Decisions. The following areas should be the basis of your decision making process. They are as follows Product Design merchandising Assembly Compensation, Training, and Labor Force Special Order Bids Social tariff and CitizenshipFinance What Your Board of Directors Expects. The Board of Directors has given you and your co-managers broad strategy-making and operating authority to pursue the achievem ent of performance objectives, subject to two primary constraints (1) Your company whitethorn not merge with another company the Board wishes the company to endure independent. And (2), company co-managers are expected to comply fully with all lawful and regulatory requirements and to conduct the companys business in an respectable manner. Good Luck. R. G. Revers PhD