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Compusa Case Study Solution
Compusa Case Study Help
Compusa Case Study Analysis
The following section concentrates on the of marketing for Compusa where the company's clients, competitors and core proficiencies have assessed in order to validate whether the choice to release Case Study Help under Compusa trademark name would be a practical choice or not. We have first of all taken a look at the type of clients that Compusa handle while an examination of the competitive environment and the business's strengths and weak points follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Compusa name.
Both the groups use Compusa high efficiency adhesives while the business is not just involved in the production of these adhesives however also markets them to these consumer groups. We would be focusing on the customers of instant adhesives for this analysis because the market for the latter has a lower capacity for Compusa compared to that of instant adhesives.
The total market for immediate adhesives is around 890,000 in the United States in 1978 which covers both client groups which have been determined earlier.If we look at a breakdown of Compusa possible market or consumer groups, we can see that the business offers to OEMs (Initial Equipment Manufacturers), Do-it-Yourself clients, repair and overhauling companies (MRO) and manufacturers handling items made from leather, metal, wood and plastic. This variety in clients recommends that Compusa can target has different options in regards to segmenting the market for its brand-new product especially as each of these groups would be requiring the very same kind of product with respective modifications in demand, quantity or product packaging. The client is not cost delicate or brand mindful so launching a low priced dispenser under Compusa name is not a suggested alternative.
Compusa is not just a producer of adhesives however takes pleasure in market management in the instantaneous adhesive market. The company has its own proficient and certified sales force which adds worth to sales by training the company's network of 250 suppliers for assisting in the sale of adhesives.
Core competences are not restricted to adhesive production only as Compusa likewise concentrates on making adhesive dispensing devices to facilitate the use of its items. This double production method gives Compusa an edge over rivals because none of the rivals of dispensing devices makes instantaneous adhesives. Additionally, none of these competitors sells straight to the consumer either and uses distributors for connecting to clients. While we are taking a look at the strengths of Compusa, it is important to highlight the company's weaknesses too.
The company's sales staff is skilled in training suppliers, the fact remains that the sales team is not trained in selling devices so there is a possibility of relying greatly on suppliers when promoting adhesive devices. It needs to also be noted that the suppliers are revealing hesitation when it comes to offering devices that requires servicing which increases the difficulties of offering equipment under a specific brand name.
If we take a look at Compusa product line in adhesive equipment especially, the company has products targeted at the high end of the market. The possibility of sales cannibalization exists if Compusa sells Case Study Help under the exact same portfolio. Provided the fact that Case Study Help is priced lower than Compusa high-end line of product, sales cannibalization would certainly be affecting Compusa sales revenue if the adhesive devices is offered under the company's brand name.
We can see sales cannibalization impacting Compusa 27A Pencil Applicator which is priced at $275. If Case Study Help is released under the business's brand name, there is another possible danger which could decrease Compusa earnings. The reality that $175000 has actually been spent in promoting SuperBonder recommends that it is not a good time for launching a dispenser which can highlight the reality that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instant adhesive.
Additionally, if we look at the market in general, the adhesives market does disappoint brand orientation or rate consciousness which offers us 2 additional reasons for not introducing a low priced product under the company's brand.
The competitive environment of Compusa would be studied via Porter's five forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low particularly as the purchaser has low knowledge about the item. While business like Compusa have managed to train suppliers concerning adhesives, the last consumer depends on suppliers. Around 72% of sales are made straight by makers and distributors for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is controlled by 3 gamers, it could be stated that the provider takes pleasure in a higher bargaining power compared to the purchaser. Nevertheless, the fact stays that the provider does not have much impact over the buyer at this moment especially as the purchaser does not show brand acknowledgment or price level of sensitivity. This suggests that the supplier has the greater power when it pertains to the adhesive market while the maker and the purchaser do not have a significant control over the actual sales.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry revealed by foreign Japanese competitors in the instantaneous adhesive market suggests that the marketplace enables ease of entry. However, if we look at Compusa in particular, the company has dual capabilities in terms of being a producer of instant adhesives and adhesive dispensers. Potential hazards in equipment dispensing industry are low which reveals the possibility of developing brand awareness in not only instantaneous adhesives but likewise in giving adhesives as none of the industry players has actually managed to place itself in double abilities.
Danger of Substitutes: The threat of alternatives in the instantaneous adhesive industry is low while the dispenser market in particular has substitutes like Glumetic tip applicators, built-in applicators, pencil applicators and advanced consoles. The fact stays that if Compusa presented Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has offered numerous factors for not launching Case Study Help under Compusa name, we have a recommended marketing mix for Case Study Help offered listed below if Compusa chooses to go ahead with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor vehicle services' for a number of factors. This market has an additional development capacity of 10.1% which might be a great adequate specific niche market segment for Case Study Help. Not just would a portable dispenser deal benefit to this specific market, the truth that the Do-it-Yourself market can also be targeted if a potable low priced adhesive is being offered for usage with SuperBonder.
Price: The recommended cost of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or by means of direct selling. This price would not include the expense of the 'vari idea' or the 'glumetic pointer'. A price listed below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance shop needs to purchase the item on his own. This would increase the possibility of affecting mechanics to acquire the product for usage in their daily maintenance jobs.
Compusa would only be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross profitability and net profitability for Compusa for releasing Case Study Help.
Place: A circulation model where Compusa directly sends the item to the local supplier and keeps a 10% drop delivery allowance for the distributor would be used by Compusa. Considering that the sales group is already engaged in selling instantaneous adhesives and they do not have knowledge in offering dispensers, including them in the selling process would be expensive particularly as each sales call costs approximately $120. The suppliers are already selling dispensers so selling Case Study Help through them would be a favorable option.
Promotion: A low promotional budget should have been assigned to Case Study Help but the fact that the dispenser is a development and it requires to be marketed well in order to cover the capital costs sustained for production, the suggested advertising plan costing $51816 is advised for at first introducing the item in the market. The prepared ads in magazines would be targeted at mechanics in lorry maintenance shops. (Suggested text for the advertisement is shown in appendix 3 while the 4Ps are summarized in appendix 4).
