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Usec Inc Case Study Solution
Usec Inc Case Study Help
Usec Inc Case Study Analysis
The following area focuses on the of marketing for Usec Inc where the business's consumers, competitors and core competencies have evaluated in order to validate whether the decision to release Case Study Help under Usec Inc brand would be a possible choice or not. We have first of all looked at the kind of customers that Usec Inc deals in while an assessment of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the justification for not introducing Case Study Help under Usec Inc name.
Usec Inc clients can be segmented into 2 groups, industrial consumers and last customers. Both the groups utilize Usec Inc high performance adhesives while the company is not just involved in the production of these adhesives however also markets them to these customer groups. There are two types of products that are being offered to these possible markets; anaerobic adhesives and instant adhesives. We would be concentrating on the consumers of instant adhesives for this analysis given that the marketplace for the latter has a lower capacity for Usec Inc compared to that of instantaneous adhesives.
The total market for instant adhesives is approximately 890,000 in the US in 1978 which covers both consumer groups which have been recognized earlier.If we take a look at a breakdown of Usec Inc prospective market or customer groups, we can see that the company offers to OEMs (Original Equipment Manufacturers), Do-it-Yourself clients, repair and overhauling companies (MRO) and producers handling products made of leather, metal, wood and plastic. This diversity in consumers recommends that Usec Inc can target has numerous alternatives in regards to segmenting the marketplace for its brand-new item especially as each of these groups would be requiring the exact same kind of product with respective changes in product packaging, need or amount. The client is not cost delicate or brand mindful so releasing a low priced dispenser under Usec Inc name is not a suggested alternative.
Usec Inc is not just a producer of adhesives but delights in market leadership in the immediate adhesive industry. The business has its own proficient and competent sales force which adds value to sales by training the company's network of 250 suppliers for facilitating the sale of adhesives. Usec Inc believes in exclusive circulation as suggested by the truth that it has actually picked to offer through 250 distributors whereas there is t a network of 10000 distributors that can be checked out for expanding reach via distributors. The business's reach is not limited to The United States and Canada just as it likewise enjoys worldwide sales. With 1400 outlets spread all across North America, Usec Inc has its in-house production plants instead of utilizing out-sourcing as the favored technique.
Core proficiencies are not restricted to adhesive manufacturing only as Usec Inc also specializes in making adhesive giving equipment to facilitate using its items. This dual production method provides Usec Inc an edge over rivals considering that none of the competitors of giving devices makes immediate adhesives. Furthermore, none of these competitors sells directly to the consumer either and uses distributors for reaching out to consumers. While we are looking at the strengths of Usec Inc, it is essential to highlight the company's weak points.
Although the company's sales staff is experienced in training suppliers, the reality remains that the sales group is not trained in selling equipment so there is a possibility of relying greatly on distributors when promoting adhesive devices. It must also be noted that the distributors are showing reluctance when it comes to selling equipment that requires servicing which increases the obstacles of offering equipment under a specific brand name.
The business has actually items intended at the high end of the market if we look at Usec Inc product line in adhesive devices particularly. The possibility of sales cannibalization exists if Usec Inc sells Case Study Help under the same portfolio. Offered the truth that Case Study Help is priced lower than Usec Inc high-end product line, sales cannibalization would certainly be affecting Usec Inc sales earnings if the adhesive equipment is offered under the business's brand.
We can see sales cannibalization affecting Usec Inc 27A Pencil Applicator which is priced at $275. There is another possible risk which might lower Usec Inc income if Case Study Help is launched under the company's trademark name. The reality that $175000 has been spent in promoting SuperBonder recommends that it is not a good time for introducing 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 not show brand name orientation or cost awareness which offers us 2 extra factors for not introducing a low priced product under the business's trademark name.
The competitive environment of Usec Inc would be studied by means of Porter's five forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this industry is low specifically as the purchaser has low knowledge about the item. While companies like Usec Inc have actually managed to train distributors regarding adhesives, the last consumer is dependent on suppliers. Around 72% of sales are made straight by producers and suppliers for instant adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is dominated by 3 players, it could be said that the supplier enjoys a higher bargaining power compared to the purchaser. Nevertheless, the truth remains that the provider does not have much impact over the purchaser at this point particularly as the buyer does not show brand recognition or rate sensitivity. This indicates that the supplier has the higher power when it pertains to the adhesive market while the manufacturer and the purchaser do not have a major control over the actual sales.
Threat of new entrants: The competitive environment with its low brand commitment and the ease of entry revealed by foreign Japanese competitors in the instantaneous adhesive market indicates that the market permits ease of entry. If we look at Usec Inc in specific, the business has double abilities in terms of being a manufacturer of immediate adhesives and adhesive dispensers. Potential dangers in devices dispensing industry are low which shows the possibility of creating brand awareness in not only immediate adhesives however also in dispensing adhesives as none of the industry players has managed to place itself in dual abilities.
Hazard of Substitutes: The risk of substitutes in the instantaneous adhesive market is low while the dispenser market in particular has alternatives like Glumetic idea applicators, inbuilt applicators, pencil applicators and advanced consoles. The fact stays that if Usec Inc presented Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually provided different factors for not launching Case Study Help under Usec Inc name, we have actually a suggested marketing mix for Case Study Help provided below if Usec Inc decides to go ahead with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Automobile services' for a number of factors. There are currently 89257 establishments in this segment and a high use of roughly 58900 lbs. is being used by 36.1 % of the marketplace. This market has an additional development potential of 10.1% which may be a sufficient specific niche market sector for Case Study Help. Not only would a portable dispenser deal benefit to this specific market, the reality that the Do-it-Yourself market can likewise be targeted if a drinkable low priced adhesive is being cost usage with SuperBonder. The item would be offered without the 'glumetic pointer' and 'vari-drop' so that the consumer can decide whether he wishes to choose either of the two accessories or not.
Price: The recommended price of Case Study Help has actually been kept at $175 to the end user whether it is sold through distributors or through direct selling. This rate would not include the cost of the 'vari suggestion' or the 'glumetic tip'. A rate below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle maintenance store requires to acquire the item on his own. This would increase the possibility of affecting mechanics to acquire the item for use in their daily maintenance jobs.
Usec Inc would only be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross success and net profitability for Usec Inc for introducing Case Study Help.
Place: A distribution design where Usec Inc straight sends out the item to the local supplier and keeps a 10% drop shipment allowance for the distributor would be utilized by Usec Inc. Given that the sales group is already engaged in selling instantaneous adhesives and they do not have know-how in selling dispensers, involving them in the selling process would be costly particularly as each sales call expenses around $120. The distributors are already offering dispensers so selling Case Study Help through them would be a favorable choice.
Promotion: Although a low marketing spending plan should have been assigned to Case Study Help however the fact that the dispenser is a development and it needs to be marketed well in order to cover the capital costs incurred for production, the recommended marketing strategy costing $51816 is suggested for at first introducing the product in the market. The prepared advertisements in publications would be targeted at mechanics in car upkeep stores. (Suggested text for the advertisement is displayed in appendix 3 while the 4Ps are summed up in appendix 4).
