Fenix Del Sur

349 Words2 Pages
I. Factual Summary: (Nonobvious or indirect information) a) US national market (branch offices in Los Angeles, Miami, and Boston) for sales. b) Feˊnix del Sur has differentiated itself in the market place as a supplier of authentic products. c) Limited distribution (customer) outlets (exclusively through specialty dealers, firm sponsored showings, and few exclusive department stores). II. Case Problem / Opportunity: (Identify case objective and obstacle) a) The company’s objective is to increase sales revenue ($4 million) and broaden their position in the US National Market. The contract offered by the mass-merchandise department store would enable this objective to be met. b) The company’s problem is that by accepting the contract, replica production would be tripled and they may lose their reputation (brand image) as a reputable authentic supplier. a. Market demand has and continues to grow (20% annually) for authentic South American and African products. b. Feˊnix del Surs’ bargaining position has eroded due to increased competition (11 major competitors instead of 5). c. Aggressive competition (dealers, specialty stores, amateurs, and internet) has reduced gross margins. d. Authentic product sourcing has become more difficult (political situations and government “national significance”). e. Inauthentic junk dumped on the public has given the industry a bad name. III. Alternative Solutions: (May be more than one to solve problem) a) Negotiate a revised contract with replicas that are clearly identified. This differentiate authentic from replica and enable Feˊnix del Sur to maintain its brand image (authentic) with higher margins. b) Negotiate a revised contract with a reduced amount of replicas. Again this would enable Feˊnix del Sur to maintain its brand image

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