Li And Fung Trading Ltd Case Study Help Checklist

Li And Fung Trading Ltd Case Study Help Checklist

Li And Fung Trading Ltd Case Study Solution
Li And Fung Trading Ltd Case Study Help
Li And Fung Trading Ltd Case Study Analysis

3 C Analyses for Evaluating Li And Fung Trading Ltd decision to launch Case Study Solution

The following area concentrates on the 3Cs of marketing for Li And Fung Trading Ltd where the company's consumers, rivals and core competencies have actually examined in order to validate whether the decision to release Case Study Help under Li And Fung Trading Ltd brand would be a possible alternative or not. We have to start with looked at the kind of customers that Li And Fung Trading Ltd deals in while an assessment of the competitive environment and the business's weaknesses and strengths follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Li And Fung Trading Ltd name.
Li And Fung Trading Ltd Case Study Solution

Customer Analysis

Li And Fung Trading Ltd clients can be segmented into two groups, last customers and commercial clients. Both the groups utilize Li And Fung Trading Ltd high performance adhesives while the company is not only associated with the production of these adhesives but also markets them to these consumer groups. There are two types of products that are being sold to these prospective markets; anaerobic adhesives and instantaneous adhesives. We would be focusing on the customers of immediate adhesives for this analysis because the market for the latter has a lower potential for Li And Fung Trading Ltd compared to that of instantaneous adhesives.

The total market for instantaneous adhesives is approximately 890,000 in the United States in 1978 which covers both client groups which have actually been determined earlier.If we take a look at a breakdown of Li And Fung Trading Ltd possible market or consumer groups, we can see that the company offers to OEMs (Original Devices Manufacturers), Do-it-Yourself clients, repair work and upgrading business (MRO) and manufacturers dealing in items made of leather, plastic, metal and wood. This variety in customers suggests that Li And Fung Trading Ltd can target has different options in terms of segmenting the marketplace for its new item especially as each of these groups would be needing the same type of product with particular modifications in packaging, quantity or need. Nevertheless, the consumer is not price delicate or brand mindful so launching a low priced dispenser under Li And Fung Trading Ltd name is not a recommended option.

Company Analysis

Li And Fung Trading Ltd is not simply a producer of adhesives but enjoys market management in the instantaneous adhesive industry. The company has its own competent and qualified sales force which adds value to sales by training the business's network of 250 suppliers for helping with the sale of adhesives.

Core skills are not restricted to adhesive manufacturing just as Li And Fung Trading Ltd likewise concentrates on making adhesive giving equipment to facilitate the use of its items. This dual production strategy provides Li And Fung Trading Ltd an edge over rivals since none of the rivals of giving equipment makes immediate adhesives. Additionally, none of these rivals offers directly to the customer either and uses suppliers for reaching out to consumers. While we are looking at the strengths of Li And Fung Trading Ltd, it is important to highlight the business's weaknesses.

The company's sales personnel is knowledgeable in training distributors, the reality stays that the sales team is not trained in offering equipment so there is a possibility of relying heavily on distributors when promoting adhesive devices. Nevertheless, it needs to likewise be noted that the suppliers are revealing hesitation when it pertains to selling equipment that needs servicing which increases the challenges of offering equipment under a specific brand.

If we look at Li And Fung Trading Ltd line of product in adhesive devices particularly, the company has actually items targeted at the luxury of the marketplace. The possibility of sales cannibalization exists if Li And Fung Trading Ltd offers Case Study Help under the exact same portfolio. Provided the fact that Case Study Help is priced lower than Li And Fung Trading Ltd high-end product line, sales cannibalization would absolutely be impacting Li And Fung Trading Ltd sales income if the adhesive equipment is sold under the company's brand name.

We can see sales cannibalization impacting Li And Fung Trading Ltd 27A Pencil Applicator which is priced at $275. There is another possible threat which could decrease Li And Fung Trading Ltd profits if Case Study Help is released under the business's trademark name. The truth that $175000 has been spent in promoting SuperBonder suggests that it is not a great time for launching 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.

Furthermore, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or rate awareness which provides us 2 additional reasons for not launching a low priced item under the business's brand.

Competitor Analysis

The competitive environment of Li And Fung Trading Ltd would be studied through Porter's five forces analysis which would highlight the degree of competition in the market.

Degree of Rivalry:

Currently we can see that the adhesive market has a high growth capacity due to the presence of fragmented segments with Li And Fung Trading Ltd enjoying leadership and a combined market share of 75% with 2 other industry players, Eastman and Permabond. While market competition between these players could be called 'extreme' as the customer is not brand conscious and each of these players has prominence in regards to market share, the fact still remains that the industry is not saturated and still has several market sectors which can be targeted as possible specific niche markets even when introducing an adhesive. Nevertheless, we can even explain the fact that sales cannibalization might be causing industry competition in the adhesive dispenser market while the marketplace for instant adhesives offers growth potential.

Bargaining Power of Buyer: The Bargaining power of the purchaser in this market is low specifically as the purchaser has low understanding about the item. While companies like Li And Fung Trading Ltd have managed to train suppliers regarding adhesives, the final customer is dependent on distributors. Roughly 72% of sales are made directly by producers and distributors for instant adhesives so the buyer has a low bargaining power.

Bargaining Power of Supplier: Given the reality that the adhesive market is dominated by three gamers, it could be said that the supplier enjoys 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 particularly as the buyer does not show brand name recognition or cost sensitivity. When it comes to the adhesive market while the buyer and the manufacturer do not have a major control over the real sales, this shows that the supplier has the higher 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 immediate adhesive market indicates that the marketplace permits ease of entry. However, if we take a look at Li And Fung Trading Ltd in particular, the business has double capabilities in terms of being a producer of adhesive dispensers and immediate adhesives. Potential threats in devices dispensing market are low which shows the possibility of producing brand awareness in not only instant adhesives however likewise in dispensing adhesives as none of the industry gamers has actually handled to position itself in double abilities.

Threat of Substitutes: The risk of alternatives in the instantaneous adhesive market is low while the dispenser market in particular has replacements like Glumetic tip applicators, in-built applicators, pencil applicators and advanced consoles. The truth stays that if Li And Fung Trading Ltd introduced Case Study Help, it would be delighting in sales cannibalization for its own products. (see appendix 1 for structure).

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

Li And Fung Trading Ltd Case Study Help

Despite the fact that our 3C analysis has provided numerous factors for not introducing Case Study Help under Li And Fung Trading Ltd name, we have a recommended marketing mix for Case Study Help offered below if Li And Fung Trading Ltd chooses to go on with the launch.

Product & Target Market: The target audience chosen for Case Study Help is 'Motor vehicle services' for a variety of reasons. There are currently 89257 establishments in this segment and a high usage of around 58900 lbs. is being used by 36.1 % of the market. This market has an extra development potential of 10.1% which may be a good enough niche market sector for Case Study Help. Not only would a portable dispenser offer convenience to this specific market, the truth that the Diy 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 tip' and 'vari-drop' so that the consumer can choose whether he wants to select either of the two devices or not.

Price: The suggested rate of Case Study Help has been kept at $175 to the end user whether it is offered through suppliers or via direct selling. A price below $250 would not require approvals from the senior management in case a mechanic at a motor car upkeep store needs to purchase the item on his own.

Li And Fung Trading Ltd would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross success and net success for Li And Fung Trading Ltd for introducing Case Study Help.

Place: A circulation design where Li And Fung Trading Ltd straight sends out the product to the local supplier and keeps a 10% drop delivery allowance for the supplier would be utilized by Li And Fung Trading Ltd. Since the sales group is already taken part in selling instantaneous adhesives and they do not have competence in selling dispensers, involving them in the selling process would be costly especially as each sales call expenses around $120. The distributors are already offering dispensers so offering Case Study Help through them would be a favorable alternative.

Promotion: A low promotional budget plan needs to have been assigned to Case Study Help but 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 suggested marketing strategy costing $51816 is advised for initially introducing the item in the market. The planned advertisements in magazines would be targeted at mechanics in lorry maintenance shops. (Recommended 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
Li And Fung Trading Ltd Case Study Analysis

Although a suggested plan of action in the form of a marketing mix has been discussed for Case Study Help, the reality still remains that the item would not complement Li And Fung Trading Ltd line of product. We have a look at appendix 2, we can see how the total gross profitability for the two designs is anticipated to be approximately $49377 if 250 units of each design are produced per year based on the plan. The preliminary planned marketing is approximately $52000 per year which would be putting a strain on the company's resources leaving Li And Fung Trading Ltd with a negative net income if the expenditures are designated to Case Study Help just.

The reality that Li And Fung Trading Ltd has already sustained an initial investment of $48000 in the form of capital expense and model development shows that the earnings from Case Study Help is insufficient to undertake the threat of sales cannibalization. Aside from that, we can see that a low priced dispenser for a market showing low elasticity of need is not a more effective option especially of it is impacting the sale of the business's earnings producing designs.

Executive Summary Porters Five Forces Analysis Pestel Analysis Financial Analysis
Generic Strategy Vrine Analysis