Professional Documents
Culture Documents
David Steinfeld
207316730
Increased presence and focus in the growing high-end market segment will ensure Fiytas domestic and international success.
Price
Moving toward higher pricing Highest average domestic price
Place
Forward integrated with Harmony World Watch Center (standalone retail) HengLianDa expanded to retail department stores
Promotion
Sponsorships and competitions International Stature Historical value communicated Exceptional sales and service value added
Segmentation
Gender Personality Type
Targeting
High End 18% of revenues Medium 48% of revenues Low end 34% of revenues
Positioning
Technologically advanced National and historic The best space watch
Cons:
Efforts are also focused on the low margin low end segment
10% of industry sales vs. 33% of Fiytas sales means competition for a small pie.
Firm image might be sacrificed with introduction of low end brands Products for most segments also a con less focus
Alternatives to Consider
The 3-Pronged Approach
Develop low and mid-level brands for the low end market Purchase a luxury brand Solidify Mid-level stature
High Class
Purchase a luxury brand and focus on this growing, valuable market
Status Quo
Business as usual Maintain stature in the mid-level market
Which strategic direction will best achieve the goals of the firm?
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6
9
8
4
4
Costs
Totals
6
26
8
34
10
23
A Luxury focused strategy will offer the most benefits for the best cost and risk
Recommendation
High Class: Purchase an international luxury brand
Opens up domestic and international demand for Fiyta Products. Strongly positions Fiyta in a segment that represents 85.1% of domestic sales. Technical knowledge gained from acquisition Leverage distribution network capabilities Diversifies revenue streams away from low profit segments Aligned with the core values, mission, and competencies of Fiyta
Risk Analysis
Risks
International Luxury brand may not sell well
Mitigators
1) Front line competencies at Harmony World Watch Centre leveraged
1) Careful evaluation of the price-benefit ratio of international brands 2) Growing profits can potentially outweigh investment quickly 1) Low end markets declining and have low profits 2) Med-level consumers will appreciate the firms positioning
Concluding Remarks
Increased presence and focus in the growing high-end market segment will ensure Fiytas domestic and international success
Fiytas aggressive expansion into the luxury segment will provide great opportunities for growth in the high end segment Experience as an international brand will help drive growth globally for Fityas products, and services
Opens up an avenue for international growth of Harmony WWC
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Appendices
11
S.W.O.T Analysis
Strengths:
National and historic brand Technologically advanced products Emphasis on quality Vertical integration Exceptional sales and service value added
Weaknesses:
Less than 0.1% market share of high end Majority of units sold in lowest profit segment
Opportunities:
High-end segment growing Trade policy may protect domestic market Growing wealth of consumers Relatively low market share (upside potential)
Threats:
High industry rivalry Price competition Domestic sales are declining
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P.E.S.T Analysis
Political:
Trade policy affects domestic competition Space program alliance
Economic:
Growing wealth of consumers Intense price competition in low end segment
Socio-Cultural:
Watches no longer one of 3 elusive items in Chinese culture Desire for mechanical watches has grown Watches seen as trendy fashion accessories
Technological:
Watch technology changing for certain applications
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Track and develop sales and service for the high-end segment Evaluate and purchase target international luxury brand
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1) Forecasted figures hold cost-revenue ratios constant 2) 3B RMB high end sales * 85% international brands share *0.4% increase in share= 10.2M
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High Class
High costs Risk of brand failing
Status Quo
Failure to address market trends Left behind by competition
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High Class
Best addresses the pride of products at the firm
Also the best option for continued domestic and international growth
Status Quo
Left behind by competition Not in sync with values and mission
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