Portico
1. Current strategy & results
Promotion: not mentioned
Product: wooden doors from Costa Rica
Price:
The current strategy focuses mainly on the low price of the product. The market for wooden doors, especially for high quality doors, is little to small in Costa Rica, so that is why the company is exporting to the US. Furthermore the financial condition of the company was very bad, so they had to make profits in short period of time, which explains the low price strategy and the big chain distribution, that makes it easy to get economies of scale in a short time.
Also the company just pays a small price for its raw materials in Costa Rica, which makes it easy to maintain a low price strategy in the US market.
The doors of the company are in the lower price category for wooden doors, but they seem to be superior of those doors from the competition concerning quality.
Place:
The company is involved in an intensive distribution through big chains of building supply retail outlets. To utilize the new built plant the company had to produce and sell at a high volume to the US by exporting. By this strategy they try to target the mainstream US market with their product.
Results:
The company had problems with financing the new plant in the beginning. But with the established building supply retailer contracts in the US and their high volume of exports they got back on track and reached a break even on a cash basis recently.
2. plans for the future
The future strategy is to serve a special niche in the US market by selling higher priced doors through regional distributors, who then sell the doors to the customers. This new strategy focuses on a higher quality product that is sold with a higher price. It also emphasizes on the service factor of the specialized retailers, who target a different type of customer. Instead of a one-stage distribution channel this would be an example of a two-stage distribution channel strategy, which implies a different pricing strategy. The selective distribution of the new strategy would possibly give their product a new, higher quality image and get the customer more service.
3. Why change market positioning?
The company has the opinion that their product is of a higher quality and could be sold with a higher price than current. They want to change their positioning because they want to target a different customer group that is more concerned with quality wooden doors.
Internally the strategy moving forward was unclear. The chance to address 25,000 dealers demanded the new leadership had a clear picture of their mission moving forward. With a very narrow scope of product offerings and the slowing sales of their high-end speakers, the decision to expand into additional products, or stay focused on their main revenue source would determine the future of the company. Offering their product in the large retailer market and pulling away from the independent installers had already damaged their brand equity. Furthermore, engaging with the production home builders, while generating the necessary revenues for survival, alienated the custom installer and their referral clients. (Kerin & Peterson, 2013). Considering the relatively small size of the company combined with the dangers associated with brand extension could overstress the resources necessary to launch and maintain a new line. One of the keys to a successful concentric diversification is close coordination with existing customers and distributors. Unfortunately, the dealers that had made them successful were not pleased with their recent brand dilution. (Gordon,
For exemple they had issue to open in Mexico creating multiple problems for the agrofood sector but as well by reducing the foreign investment in the country. This has created a huge scandal all over the news, encountering the human rights of the population living in the area but as well the environmental problems linked to this partnerships with notorious mexicans real estate agent making this opening not really
Among the multitude of American corporations, few stand out like the United Fruit Company. Reviled the world over, United Fruit was one of America’s most notable early multinational corporations. Operating all over Latin America and peddling their produce across the globe, United Fruit would get its start in Costa Rica, a small Central American country nestled between Nicaragua and Panama. The decision to attempt to modernize Costa Rica by General Tomás Guardia would prove to be a fateful one that forever altered the course of Central America.
This allows them to purchase high volume for a lower cost. Bringing over 20,000 products into one convenient location and with over 450 brands they provide a large selection.
Each country has its own culture, with subcultures inside the dominant culture (Schaefer, 2009, p.69). “Culture is the totality of learned, socially transmitted custom, knowledge, material objects, and behavior” (Schaefer, 2009, p.57). Values, artifacts, and ideas are also part of culture (p57). With globalization there is the integration of these cultural aspects, as well as language, social movements, and ideas throughout the world (Schaefer, 2009, p.20). Internationalization helps with this integration. Internationalization is the process of planning and implementing products and services so that they can easily be adapted to specific local languages and cultures (Linfo, 2006). Numerous American retail firms have expanded to other countries. Many have been quite successful due to their internationalization. However, failure to study the culture, retail practices, and consumer market of the country they intend to expand to can be quite costly. Although Home Depot is one of the world’s largest home improvement stores, their expansion to Chile cost them enormous financial loss, resulting in their divestment (Bianchi & Ostale, 2006, section 1, para3). This paper will look at successful international expansion of Home Depot stores, analyze what mistakes were made in Chile, and make suggestions of what could have been done differently.
The company had to be the second largest retailer shop in the US; it has many advantages that come along. The customers well acknowledge the company and its brand have been well established.
The business is a major supplier of bedroom furniture to large retailers, including FrontRoom Furnishings, Levin's, Kittle's Furniture and Furniture Affair, said Karmen, who said the local company has grown by taking its product out of the realm of small “mom and pop” stores into the
One of the main costs is to manufacture their products. A major reason the companies are moving manufacturing plants to Asia and South America is to lower manufacturing cost. This will lower the cost for the customer and keep each company competitive and allow them to keep a high margin. Another cost is the inventory cost for each company. Each company needs major capital to store their broad catalog of products. This is especially true for Fastenal because one of their niches is time of delivery. Since Fastenal has more distribution plants we as a company are able to get a customer an order in a shorter period of time. The problem for both companies is since the catalog is so broad many products end up staying in inventory for too long raising inventory costs. Also another cost is product development and management. Each company has many products that need to be developed and the customer seems to always want something else. Both companies spend capital to satisfy their customer’s product needs and each company needs to manage product
Place: They opened discount factory outlet stores in rural areas and retail stores in urban shopping center. By selling different kind of product in different places help them to meet the different need of the customers. On the other hand, they also sell their product online, where customer can purchase their product at anywhere and anytime. All this make them be able to maximize their gain.
Conclusion: Given the current economic status the home improvement industry is in a low spot with sales. With the decrease in building new homes we have to focus mainly on home improvements. The three strong points we have against existing rivalries are our great locations, quantity of quality products, and convenient customer service. With these great qualities we can move ahead and stay ahead of our competitors during these times.
... This could become the third solid country of operation that Costco needs to offset its increasing costs. Strengthening the Costco name in its burgeoning market of Mexico will help offset merchandising costs by increasing store loyalty and sales. By increasing its market share in Mexico, Costco will be able to have more income to offset the merchandising costs and it can then have the necessary capital to continue its growth; thus solving key issues 2 & 3.
Masco Cabinetry’s mission has always been to “Be the market leader in providing kitchen and bath solutions with meaningful innovation for customers, designers and consumers” (Employee Handbook, 2012). The company has been achieving success in one or more of those areas for the past 68 years. Each year Masco Cabinetry has developed new door styles, finishes, and products to meet the demands of homeowners and home builders.
...urselfers. The distribution strategy identifies the major channels through which the product will delivered and pushed through to the consumers.
This strategy is very much about the business which is carried out as usual. In this strategy the marketer is focusing on both the product and the market opportunity.
...ials to make their products rather than using materials that carries hazardous materials. There widespread of products help expand the company all around the world, and inspire the world with great performance and design.