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Strong Tie Ltd Case Study Solution
Strong Tie Ltd Case Study Help
Strong Tie Ltd Case Study Analysis
The following area focuses on the of marketing for Strong Tie Ltd where the company's clients, competitors and core competencies have actually evaluated in order to justify whether the decision to release Case Study Help under Strong Tie Ltd trademark name would be a possible choice or not. We have first of all looked at the type of clients that Strong Tie Ltd deals in while an evaluation of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the justification for not launching Case Study Help under Strong Tie Ltd name.
Both the groups use Strong Tie Ltd high efficiency adhesives while the business is not just included in the production of these adhesives however likewise markets them to these customer groups. We would be focusing on the consumers of instantaneous adhesives for this analysis given that the market for the latter has a lower potential for Strong Tie Ltd compared to that of instant adhesives.
The total market for instantaneous adhesives is roughly 890,000 in the United States in 1978 which covers both customer groups which have been recognized earlier.If we look at a breakdown of Strong Tie Ltd possible market or customer groups, we can see that the business offers to OEMs (Original Devices Makers), Do-it-Yourself clients, repair work and revamping companies (MRO) and makers handling items made of leather, metal, plastic and wood. This diversity in clients recommends that Strong Tie Ltd can target has different alternatives in regards to segmenting the marketplace for its brand-new product particularly as each of these groups would be requiring the same kind of item with particular changes in demand, amount or product packaging. The consumer is not rate delicate or brand mindful so launching a low priced dispenser under Strong Tie Ltd name is not an advised alternative.
Strong Tie Ltd is not simply a producer of adhesives but enjoys market leadership in the instantaneous adhesive industry. The company has its own competent and qualified sales force which adds worth to sales by training the company's network of 250 distributors for facilitating the sale of adhesives.
Core proficiencies are not restricted to adhesive production only as Strong Tie Ltd also specializes in making adhesive dispensing devices to assist in using its products. This double production technique offers Strong Tie Ltd an edge over rivals because none of the competitors of dispensing equipment makes instantaneous adhesives. Additionally, none of these competitors sells directly to the consumer either and uses suppliers for connecting to clients. While we are taking a look at the strengths of Strong Tie Ltd, it is essential to highlight the business's weaknesses too.
The business's sales staff is competent in training suppliers, the truth stays that the sales team is not trained in selling equipment so there is a possibility of relying greatly on suppliers when promoting adhesive equipment. It needs to also be kept in mind that the distributors are revealing reluctance when it comes to selling equipment that requires maintenance which increases the difficulties of offering equipment under a specific brand name.
If we look at Strong Tie Ltd line of product in adhesive equipment especially, the company has products focused on the high-end of the marketplace. If Strong Tie Ltd offers Case Study Help under the same portfolio, the possibility of sales cannibalization exists. Given the reality that Case Study Help is priced lower than Strong Tie Ltd high-end product line, sales cannibalization would absolutely be affecting Strong Tie Ltd sales profits if the adhesive devices is offered under the business's trademark name.
We can see sales cannibalization affecting Strong Tie Ltd 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the company's brand name, there is another possible danger which could decrease Strong Tie Ltd revenue. The fact that $175000 has been invested in promoting SuperBonder recommends 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 immediate adhesive.
Additionally, if we take a look at the marketplace in general, the adhesives market does not show brand orientation or rate awareness which offers us two additional reasons for not introducing a low priced item under the company's brand.
The competitive environment of Strong Tie Ltd 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 purchaser in this market is low particularly as the purchaser has low understanding about the item. While companies like Strong Tie Ltd have managed to train suppliers regarding adhesives, the final customer depends on suppliers. Approximately 72% of sales are made straight by makers and distributors for immediate adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Provided the reality that the adhesive market is dominated by 3 players, it could be stated that the supplier delights in a higher bargaining power compared to the purchaser. The truth stays that the provider does not have much influence over the buyer at this point specifically as the buyer does not reveal brand name recognition or rate sensitivity. This shows that the supplier has the greater power when it pertains to the adhesive market while the manufacturer and the buyer do not have a significant control over the real 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 instant adhesive market shows that the marketplace permits ease of entry. If we look at Strong Tie Ltd in particular, the company has dual abilities in terms of being a producer of adhesive dispensers and instantaneous adhesives. Possible hazards in equipment dispensing industry are low which reveals the possibility of creating brand awareness in not just instant adhesives however likewise in giving adhesives as none of the market players has actually handled to place itself in double capabilities.
Danger of Substitutes: The hazard of substitutes in the instantaneous adhesive industry is low while the dispenser market in particular has substitutes like Glumetic suggestion applicators, built-in applicators, pencil applicators and sophisticated consoles. The reality remains that if Strong Tie Ltd 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 provided various factors for not launching Case Study Help under Strong Tie Ltd name, we have actually a recommended marketing mix for Case Study Help offered listed below if Strong Tie Ltd chooses to proceed with the launch.
Product & Target Market: The target audience chosen for Case Study Help is 'Motor vehicle services' for a number of reasons. There are currently 89257 establishments in this sector and a high usage of roughly 58900 lbs. is being used by 36.1 % of the marketplace. This market has an additional growth capacity of 10.1% which might be a good enough niche market segment for Case Study Help. Not just would a portable dispenser offer convenience to this specific market, the fact that the Do-it-Yourself market can likewise be targeted if a safe and clean low priced adhesive is being cost usage with SuperBonder. The product would be sold without the 'glumetic idea' and 'vari-drop' so that the consumer can decide whether he wishes to go with either of the two accessories or not.
Price: The recommended price of Case Study Help has been kept at $175 to the end user whether it is offered through suppliers or via direct selling. This rate would not include the expense of the 'vari pointer' or the 'glumetic suggestion'. A price below $250 would not require approvals from the senior management in case a mechanic at an automobile maintenance store requires to purchase the product on his own. This would increase the possibility of affecting mechanics to purchase the product for use in their daily upkeep jobs.
Strong Tie Ltd would just be getting $157 per unit as shown in appendix 2 which gives a breakdown of gross success and net success for Strong Tie Ltd for releasing Case Study Help.
Place: A distribution model where Strong Tie Ltd straight sends out the product to the local distributor and keeps a 10% drop shipment allowance for the distributor would be used by Strong Tie Ltd. Considering that the sales group is already participated in selling immediate adhesives and they do not have know-how in selling dispensers, including them in the selling procedure would be expensive especially as each sales call costs approximately $120. The distributors are currently selling dispensers so offering Case Study Help through them would be a beneficial choice.
Promotion: A low promotional budget should have been appointed to Case Study Help but the reality that the dispenser is an innovation and it requires to be marketed well in order to cover the capital expenses incurred for production, the suggested marketing plan costing $51816 is advised for initially presenting the product in the market. The planned ads in publications would be targeted at mechanics in automobile maintenance shops. (Suggested text for the ad is shown in appendix 3 while the 4Ps are summed up in appendix 4).
