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Lehigh Steel Case Study Solution
Lehigh Steel Case Study Help
Lehigh Steel Case Study Analysis
The following area focuses on the of marketing for Lehigh Steel where the company's consumers, rivals and core proficiencies have assessed in order to justify whether the decision to release Case Study Help under Lehigh Steel trademark name would be a possible choice or not. We have to start with looked at the type of clients that Lehigh Steel handle while an evaluation of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the validation for not introducing Case Study Help under Lehigh Steel name.
Both the groups utilize Lehigh Steel high efficiency adhesives while the company is not only included in the production of these adhesives but also markets them to these consumer groups. We would be focusing on the consumers of immediate adhesives for this analysis considering that the market for the latter has a lower potential for Lehigh Steel compared to that of instantaneous adhesives.
The overall market for instant adhesives is roughly 890,000 in the United States in 1978 which covers both customer groups which have been identified earlier.If we look at a breakdown of Lehigh Steel possible market or client groups, we can see that the business offers to OEMs (Original Equipment Manufacturers), Do-it-Yourself consumers, repair work and overhauling companies (MRO) and producers dealing in items made from leather, metal, wood and plastic. This diversity in clients recommends that Lehigh Steel can target has numerous alternatives in regards to segmenting the market for its new product especially as each of these groups would be needing the exact same kind of item with respective changes in need, quantity or product packaging. The consumer is not price delicate or brand conscious so releasing a low priced dispenser under Lehigh Steel name is not an advised choice.
Lehigh Steel is not just a maker of adhesives but enjoys market leadership in the immediate adhesive market. The business has its own proficient and competent sales force which includes worth to sales by training the company's network of 250 distributors for assisting in the sale of adhesives.
Core proficiencies are not limited to adhesive manufacturing only as Lehigh Steel likewise specializes in making adhesive giving devices to facilitate the use of its items. This double production technique gives Lehigh Steel an edge over competitors considering that none of the rivals of giving equipment makes instantaneous adhesives. In addition, none of these rivals offers directly to the consumer either and utilizes suppliers for reaching out to customers. While we are taking a look at the strengths of Lehigh Steel, it is important to highlight the company's weaknesses also.
Although the company's sales staff is competent in training distributors, the fact remains that the sales group is not trained in selling equipment so there is a possibility of relying heavily on suppliers when promoting adhesive equipment. Nevertheless, it ought to likewise be kept in mind that the suppliers are showing reluctance when it pertains to offering equipment that requires maintenance which increases the obstacles of selling equipment under a particular brand.
If we take a look at Lehigh Steel product line in adhesive equipment especially, the business has actually products focused on the high end of the marketplace. The possibility of sales cannibalization exists if Lehigh Steel offers Case Study Help under the very same portfolio. Offered the truth that Case Study Help is priced lower than Lehigh Steel high-end line of product, sales cannibalization would absolutely be affecting Lehigh Steel sales earnings if the adhesive devices is offered under the company's brand name.
We can see sales cannibalization affecting Lehigh Steel 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the business's brand name, there is another possible danger which could lower Lehigh Steel profits. The truth that $175000 has been invested in promoting SuperBonder recommends that it is not a good time for releasing a dispenser which can highlight the truth that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the immediate adhesive.
In addition, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or rate consciousness which offers us two extra factors for not releasing a low priced item under the company's brand name.
The competitive environment of Lehigh Steel would be studied through 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 especially as the purchaser has low knowledge about the product. While business like Lehigh Steel have managed to train suppliers relating to adhesives, the last customer is dependent on distributors. Roughly 72% of sales are made directly by makers and distributors for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Given the truth that the adhesive market is dominated by three gamers, it could be stated that the supplier takes pleasure in a higher bargaining power compared to the purchaser. The fact remains that the supplier does not have much impact over the buyer at this point especially as the buyer does not reveal brand name acknowledgment or rate sensitivity. When it comes to the adhesive market while the buyer and the manufacturer do not have a major control over the actual sales, this indicates that the supplier has the greater power.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry revealed by foreign Japanese rivals in the instant adhesive market suggests that the marketplace permits ease of entry. Nevertheless, if we take a look at Lehigh Steel in particular, the company has dual abilities in regards to being a producer of immediate adhesives and adhesive dispensers. Potential threats in devices dispensing industry are low which shows the possibility of creating brand name awareness in not only instantaneous adhesives however likewise in dispensing adhesives as none of the industry players has actually managed to position itself in double abilities.
Hazard of Substitutes: The risk of replacements in the instant adhesive market is low while the dispenser market in particular has alternatives like Glumetic suggestion applicators, in-built applicators, pencil applicators and advanced consoles. The reality remains that if Lehigh Steel presented Case Study Help, it would be indulging in sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has offered various reasons for not releasing Case Study Help under Lehigh Steel name, we have a suggested marketing mix for Case Study Help given below if Lehigh Steel chooses to proceed with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Automobile services' for a number of factors. There are presently 89257 facilities in this section and a high use of around 58900 lbs. is being used by 36.1 % of the marketplace. This market has an extra growth potential of 10.1% which might be a sufficient niche market sector for Case Study Help. Not just would a portable dispenser offer convenience to this particular market, the fact that the Do-it-Yourself market can likewise be targeted if a potable low priced adhesive is being cost use with SuperBonder. The item would be offered without the 'glumetic pointer' and 'vari-drop' so that the consumer can decide whether he wants to select either of the two devices or not.
Price: The recommended rate of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or through direct selling. This cost would not include the cost of the 'vari tip' or the 'glumetic pointer'. A price listed below $250 would not require approvals from the senior management in case a mechanic at an automobile upkeep store requires to acquire the item on his own. This would increase the possibility of affecting mechanics to buy the item for use in their everyday upkeep tasks.
Lehigh Steel would just be getting $157 per unit as shown in appendix 2 which provides a breakdown of gross success and net success for Lehigh Steel for launching Case Study Help.
Place: A distribution design where Lehigh Steel straight sends out the item to the regional distributor and keeps a 10% drop delivery allowance for the distributor would be utilized by Lehigh Steel. Because the sales group is already engaged in offering instantaneous adhesives and they do not have competence in offering dispensers, including them in the selling process would be costly particularly as each sales call costs approximately $120. The suppliers are currently offering dispensers so offering Case Study Help through them would be a beneficial option.
Promotion: Although a low advertising budget plan must 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 expenses incurred for production, the recommended marketing strategy costing $51816 is suggested for initially presenting the item in the market. The prepared advertisements in publications would be targeted at mechanics in automobile maintenance stores. (Suggested text for the advertisement is shown in appendix 3 while the 4Ps are summed up in appendix 4).
