Fenix Del Sur Case Analysis Essay

I. Problem Definition Should Fe zero accept the contract to offer its countersink and potentially add $4million in additional gross sales, presumption the constraints of dedicating a large percent of their crinkle to counterparts which may pull in an effect on their kind with electric rate of flow dealers?II. Industry AnalysisAccording to the product-market matrix above, and later on reading ab out(a) the industry, it is apparent that Fe preclude del tire competes in selling verit equal to(p) artifacts to collectors. subsequently some of their clients insisted on an expand product line, Fe prevent del tire started producing replicas of their current artifacts. The replicas, in return, possess broadened the lodges market to take on pass on buyers and individuals looking for decorative items.III. Organizational AnalysisFe nonentity del Sur is a reput adapted importer of accredited Southwestern jewelry and pottery for collectors. They originally sourced Hopi and Navajo artifacts, scarcely in modern years have expanded their product line to include pre-Columbian artifacts from Peru and Venezuela, on with tribal and burial artifacts from Africa.If Fe vigour del Sur accepts the contract, their business comment would change. Since the gilds chief(prenominal) focus in soon on dealings authentic artifacts to collectors ( grievous bodily harmly finished specialty dealers, firm-sponsored showings and a a couple of(prenominal) exclusive part stores), the devoted collectors who continually leverage their products may start to look elsewhere if the comp whatsoever fully expands their product line to include umpteen replicas. The phoner would no longer be in just the authentic jewelry and pottery business, further rather also in the replica business. Therefore, their young business definition would be altered to include cosmos a producer of replicas for gift buyers. through careful verification, Fe postcode del Sur is able to successf ully determine the genuineness of South Ameri foundation and African artifacts. This skill has enab guide Fe disallow del Sur to develop a theme account as one of the most prize sources of these types of artifacts. Fe vigour del Surs distinctive capability, which sets them apart from incision stores that sell solely replicas, allows them to sell through suppliers with passing limited distribution.The confederation had originally established a solid family birth with the retailers that sold their products, often being the sole supplier to its clients. However, in more(prenominal) recent years, referable to the increase in competition, Fenix Del Surs products are not the only products being sold at some of these retailers. In fact, some of the retailers are now sending out their own buyers to deal promptly with some of the Hopi, Navajo and African sources completely stepping bypast Fenix. Therefore, the companys relationship with those retailers is not as strong collect to an increase in consumer demand for both authentic artifacts and replicas.By accepting the contract, I go through that the relationship between Fenix del Sur and the retailers they before long deal with would change. Most of the larger specialty and exclusive department stores are now dealing directly themselves or with separate suppliers. Forming this new relationship with the large number merchandiser chain, allowing them to buy at 10% downstairs the companys existing harms, would spell adventure for Fenixs current business relationships. Once the other businesses that Fenix currently deals with find out about this 10% toll cut, they go forth either find another importer of authentic artifacts and jewelry or they will demand the 10% price cut as well. If all businesses that they currently deal with demanded a 10% price cut, Fenix del Surs income statement would drastically change probably not for the better.IV. AlternativesA. Accept center a. Advantages i. Fenix Del Sur can broaden their position in the replica segment ii. They can potentially add $4million in additional sales over and above their annual growth. iii. Fenix could become a competitor in the replica business b. Disadvantagesiv. Fenix could flake out their current clientele such as the collectors they currently scar v. Accepting the contract may affect their relationship with their current dealers by make them to seek other importers that sell only authentic pieces vi. Being inform with a mass merchandiser could ruin the companys image so loyal customers who frequently purchase Fenixs items may start searching for artifacts that are imported through dealers that only sell authentic pieces vii. The 10% price cut for the mass merchandiser could hurt their reputation with all of their current suppliers. Cutting the price 10% for one type of retail yield will cause all other stores to want the akin treatment. This would be a disruptive change to Fenixs business and their overa ll profit. viii. Fenix would have to increase their replica work almost three timesB. Reject funk c. Advantages ix. The company will maintain their current relationship with dealers and customers. x. Their current sales growth per year would more than likely remain constant. xi. They would not have to give care about a price cut for any retail outlet since they already have a solid clientele of suppliers who are buying their artifacts regularly. xii. Their turnout could remain constant with no increase in the amount of replicas being produced.d. Disadvantages xiii. Fenix could lose the large increase in additional sales revenue enhancement that the mass merchandiser chain could serve well them achieve. xiv. The company could lose potential sales due to competition in the replica business if they wearyt accept the contract. xv. They would not be able to capture a broader target market.V. Recommendation after(prenominal) careful analysis and consideration of Fenix del Surs bus iness foundations, I feel that it would be best to reject the contract at this point in time. Reviewing the advantages and disadvantages above, along with assessing Fenixs current business definition led me to this conclusion. The companys current sales revenue is about $25million, and has had steady sales growth for the past ten years with an annual increase of 20%. This large annual increase in sales can be greatly attributed to their core competency of being able to accurately verify the authenticity of South American and African artifacts. Over time, Fenix del Sur has established a national reputation as one of the most respected sources of these types of artifacts.Aside from their solid sales growth, Fenix has established great relationships with the specialty dealers and exclusive department stores that sell their products. Building solid relationships with clients is a action that takes a lot of time and attention. Without these relationships, Fenixs sales would drastically decrease, by chance causing them to go out of business. Because the company has been selling to selective types of retail outlets, the end consumers (collectors) are very loyal to continually purchasing Fenixs products.If Fenix del Sur reliable the contract, they would have to completely reposition their brand and business definition to include both replicas and authentic items. Because they are not in any danger of losing sales at this point in time, it would be wise for the company to continue business as they normally do. yet because an external opportunity exists does not mean that Fenix should take advantage of it. It seems as though the sales manager is very focused on the potential to add $4million in additional sales revenue. Although this may sound good at jump thought, it is always wise to consider where the business stands at the present.Overall, the contract is too demanding on Fenix. The companys prices seem to already be accepted by the specialty dealers and exclus ive department stores therefore, cutting their prices by 10% for one retail outlet will lead to relationship issues down the line. These semipermanent relationships that have taken years to nurture could be gone in a matter of months. Also, because Fenix is known for authentic artifacts, increasing their outturn of replicas three times would create a interference in their normal way of doing business. Again, this would force Fenix del Sur to reposition its brand possibly losing a lot of clientele in the process.