Nova Chemical Corp Case Study Help Checklist

Nova Chemical Corp Case Study Help Checklist

Nova Chemical Corp Case Study Solution
Nova Chemical Corp Case Study Help
Nova Chemical Corp Case Study Analysis

Analyses for Evaluating Nova Chemical Corp decision to launch Case Study Solution

The following section concentrates on the of marketing for Nova Chemical Corp where the company's consumers, rivals and core competencies have actually evaluated in order to justify whether the decision to release Case Study Help under Nova Chemical Corp trademark name would be a possible choice or not. We have first of all taken a look at the type of clients that Nova Chemical Corp handle while an evaluation of the competitive environment and the company's strengths and weaknesses follows. Embedded in the 3C analysis is the reason for not introducing Case Study Help under Nova Chemical Corp name.
Nova Chemical Corp Case Study Solution

Customer Analysis

Both the groups use Nova Chemical Corp high performance adhesives while the company is not only included in the production of these adhesives but likewise markets them to these customer 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 Nova Chemical Corp compared to that of instant adhesives.

The overall market for immediate adhesives is approximately 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 Nova Chemical Corp potential market or client groups, we can see that the company sells to OEMs (Original Devices Producers), Do-it-Yourself clients, repair work and overhauling companies (MRO) and producers dealing in products made of leather, wood, plastic and metal. This variety in consumers recommends that Nova Chemical Corp can target has numerous options in terms of segmenting the marketplace for its new item particularly as each of these groups would be requiring the very same kind of item with respective modifications in amount, demand or product packaging. Nevertheless, the client is not price delicate or brand mindful so introducing a low priced dispenser under Nova Chemical Corp name is not a recommended option.

Company Analysis

Nova Chemical Corp is not just a manufacturer of adhesives however takes pleasure in market leadership in the instant adhesive market. The company has its own experienced and qualified sales force which includes worth to sales by training the business's network of 250 distributors for assisting in the sale of adhesives.

Core competences are not restricted to adhesive production only as Nova Chemical Corp likewise specializes in making adhesive dispensing devices to facilitate using its products. This double production strategy provides Nova Chemical Corp an edge over competitors given that none of the rivals of giving devices makes immediate adhesives. Additionally, none of these rivals offers straight to the consumer either and utilizes suppliers for reaching out to clients. While we are looking at the strengths of Nova Chemical Corp, it is very important to highlight the business's weaknesses also.

The company's sales personnel is competent in training suppliers, the truth remains that the sales team is not trained in offering devices so there is a possibility of relying heavily on suppliers when promoting adhesive equipment. Nevertheless, it needs to likewise be noted that the distributors are showing hesitation when it comes to offering equipment that requires maintenance which increases the difficulties of selling devices under a specific trademark name.

If we look at Nova Chemical Corp line of product in adhesive devices especially, the business has items targeted at the high-end of the marketplace. If Nova Chemical Corp sells Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Provided the truth that Case Study Help is priced lower than Nova Chemical Corp high-end line of product, sales cannibalization would absolutely be affecting Nova Chemical Corp sales income if the adhesive equipment is offered under the company's brand.

We can see sales cannibalization impacting Nova Chemical Corp 27A Pencil Applicator which is priced at $275. If Case Study Help is introduced under the company's brand name, there is another possible hazard which might lower Nova Chemical Corp profits. The truth that $175000 has been invested in promoting SuperBonder suggests that it is not a great time for releasing a dispenser which can highlight the fact that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.

In addition, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or cost awareness which offers us two extra factors for not introducing a low priced item under the company's brand.

Competitor Analysis

The competitive environment of Nova Chemical Corp would be studied via Porter's 5 forces analysis which would highlight the degree of rivalry in the market.

Degree of Rivalry:

Currently we can see that the adhesive market has a high development capacity due to the existence of fragmented sectors with Nova Chemical Corp taking pleasure in management and a combined market share of 75% with 2 other industry gamers, Eastman and Permabond. While industry competition between these players could be called 'extreme' as the consumer is not brand name conscious and each of these players has prominence in regards to market share, the truth still stays that the market is not filled and still has numerous market sections which can be targeted as potential specific niche markets even when introducing an adhesive. Nevertheless, we can even mention the fact that sales cannibalization might be leading to market rivalry in the adhesive dispenser market while the marketplace for instantaneous adhesives uses growth potential.

Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low particularly as the purchaser has low understanding about the product. While companies like Nova Chemical Corp have managed to train suppliers regarding adhesives, the final consumer depends on suppliers. Roughly 72% of sales are made straight by manufacturers and suppliers for immediate adhesives so the purchaser has a low bargaining power.

Bargaining Power of Supplier: Provided the fact that the adhesive market is controlled by three players, it could be stated that the supplier enjoys a higher bargaining power compared to the buyer. Nevertheless, the truth stays that the supplier does not have much influence over the buyer at this moment especially as the buyer does disappoint brand name recognition or price sensitivity. When it comes to the adhesive market while the purchaser and the manufacturer do not have a significant control over the actual sales, this indicates that the supplier has the higher power.

Threat of new entrants: The competitive environment with its low brand name commitment and the ease of entry shown by foreign Japanese rivals in the immediate adhesive market suggests that the market enables ease of entry. If we look at Nova Chemical Corp in specific, the business has double abilities in terms of being a producer of instant adhesives and adhesive dispensers. Possible dangers in devices dispensing industry are low which shows the possibility of creating brand name awareness in not just immediate adhesives however likewise in dispensing adhesives as none of the industry players has actually handled to place itself in dual capabilities.

Hazard of Substitutes: The hazard of replacements in the instantaneous adhesive market is low while the dispenser market in particular has alternatives like Glumetic pointer applicators, inbuilt applicators, pencil applicators and advanced consoles. The reality remains that if Nova Chemical Corp introduced Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for framework).

4 P Analysis: A suggested Marketing Mix for Case Study Help

Nova Chemical Corp Case Study Help

Despite the fact that our 3C analysis has given numerous reasons for not introducing Case Study Help under Nova Chemical Corp name, we have a recommended marketing mix for Case Study Help offered listed below if Nova Chemical Corp decides to proceed with the launch.

Product & Target Market: The target market selected for Case Study Help is 'Motor automobile services' for a number of factors. This market has an extra development potential of 10.1% which might be an excellent sufficient niche market sector for Case Study Help. Not just would a portable dispenser deal convenience to this particular market, the reality that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being sold for use with SuperBonder.

Price: The recommended rate of Case Study Help has actually been kept at $175 to the end user whether it is offered through suppliers or via direct selling. This rate would not consist of the cost of the 'vari pointer' or the 'glumetic tip'. A rate below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep shop requires to purchase the product on his own. This would increase the possibility of affecting mechanics to purchase the product for usage in their daily upkeep jobs.

Nova Chemical Corp would just be getting $157 per unit as shown in appendix 2 which provides a breakdown of gross profitability and net success for Nova Chemical Corp for launching Case Study Help.

Place: A distribution design where Nova Chemical Corp straight sends out the item to the local supplier and keeps a 10% drop delivery allowance for the supplier would be used by Nova Chemical Corp. Because the sales group is already taken part in selling immediate adhesives and they do not have knowledge in selling dispensers, including them in the selling process would be pricey specifically as each sales call costs around $120. The distributors are currently selling dispensers so offering Case Study Help through them would be a beneficial choice.

Promotion: Although a low marketing budget should have been appointed to Case Study Help but the fact that the dispenser is an innovation and it requires to be marketed well in order to cover the capital expenses incurred for production, the recommended marketing strategy costing $51816 is advised for at first introducing the item in the market. The prepared ads in magazines would be targeted at mechanics in automobile maintenance shops. (Suggested text for the advertisement is displayed in appendix 3 while the 4Ps are summarized in appendix 4).

Limitations: Arguments for forgoing the launch Case Study Analysis
Nova Chemical Corp Case Study Analysis

A suggested strategy of action in the type of a marketing mix has been discussed for Case Study Help, the reality still remains that the product would not complement Nova Chemical Corp product line. We have a look at appendix 2, we can see how the total gross profitability for the two designs is expected to be roughly $49377 if 250 units of each design are made each year based on the plan. The initial prepared advertising is roughly $52000 per year which would be putting a pressure on the business's resources leaving Nova Chemical Corp with a negative net earnings if the expenditures are allocated to Case Study Help only.

The truth that Nova Chemical Corp has currently incurred an initial investment of $48000 in the form of capital cost and prototype development suggests that the profits from Case Study Help is insufficient to carry out the danger of sales cannibalization. Besides that, we can see that a low priced dispenser for a market showing low flexibility of demand is not a preferable choice specifically of it is impacting the sale of the business's revenue generating models.