Fenix Del Sur Case Analysis Essay

I. Problem Definition Should Fe negative endure the contract to hold out its position and potenti everyy score $4million in extra sales, given the constraints of dedicating a large percent of their billet to breedings which may project an effect on their human blood with latest dealers?II. Industry Analysisharmonize to the w ar-market matrix above, and after reading ab show up the industry, it is apparent that Fe goose egg del tire competes in selling authentic artifacts to collectors. After some of their clients insisted on an expanded product contestation, Fe interdict del Sur started producing replicas of their authentic artifacts. The replicas, in return, have broadened the bon tons market to involve gift buyers and individuals flavor for decorative items.III. Organizational AnalysisFe cryptograph del Sur is a reput able-bodied importer of authentic Southwestern jewelry and pottery for collectors. They originally sourced Hopi and Navajo artifacts, nevertheless in recent yrs have expanded their product line to include pre-Columbian artifacts from Peru and Venezuela, along with tribal and burial artifacts from Africa.If Fe cryptograph del Sur accepts the contract, their trade definition would change. Since the phoners main concentre in currently on dealing authentic artifacts to collectors ( unsharedly through specialization dealers, firm-sponsored showings and a few sole(a) subdivision stores), the loyal collectors who continually acquire their products may start to look elsewhere if the company fully expands their product line to include many replicas. The company would no longer be in just the authentic jewelry and pottery logical argument, but kind of also in the replica business. Therefore, their new business definition would be altered to include organism a producer of replicas for gift buyers. through with(predicate) careful verification, Fenix del Sur is able to successfully influence the authenticity of South American and A frican artifacts. This skill has enabled Fenix del Sur to develop a guinea pig reputation as angiotensin-converting enzyme of the most respected sources of these types of artifacts. Fenix del Surs classifiable competency, which sets them apart from department stores that sell merely replicas, allows them to sell through suppliers with super limited distribution.The company had originally established a comforting relationship with the retailers that sold their products, often organism the sole supplier to its clients. However, in more than recent age, due to the increase in competition, Fenix Del Surs products are not the only products being sold at some of these retailers. In fact, some of the retailers are now sending out their own buyers to deal directly with some of the Hopi, Navajo and African sources completely stepping departed Fenix. Therefore, the companys relationship with those retailers is not as intemperate due to an increase in consumer demand for both authent ic artifacts and replicas.By accepting the contract, I feel that the relationship between Fenix del Sur and the retailers they currently deal with would change. Most of the larger specialty and exclusive department stores are now dealing directly themselves or with some other suppliers. Forming this new relationship with the mass merchandiser chain, allowing them to buy at 10% below the companys existing worths, would spell disaster for Fenixs current business relationships. Once the other businesses that Fenix currently deals with find out closely this 10% expenditure cut, they go forth either find another importer of authentic artifacts and jewelry or they leave alone demand the 10% price cut as well. If all businesses that they currently deal with demanded a 10% price cut, Fenix del Surs income statement would drastically change probably not for the better.IV. AlternativesA. Accept Contract a. Advantages i. Fenix Del Sur can broaden their position in the replica segment ii . They can capablenessly add $4million in special sales over and above their annual growth. iii. Fenix could become a competitor in the replica business b. Disadvantagesiv. Fenix could lose their current clientele such as the collectors they currently target v. Accepting the contract may affect their relationship with their current dealers by causing them to seek other importers that sell only authentic pieces vi. Being acquainted with a mass merchandiser could dash the companys image so loyal customers who frequently corrupt Fenixs items may start searching for artifacts that are imported through dealers that only sell authentic pieces vii. The 10% price cut for the mass merchandiser could hurt their reputation with all of their current suppliers. Cutting the price 10% for one type of retail passing will cause all other stores to want the same treatment. This would be a disruptive change to Fenixs business and their overall profit. viii. Fenix would have to increase their rep lica employment almost three timeB. Reject Contract c. Advantages ix. The company will maintain their current relationship with dealers and customers. x. Their current sales growth per year would more than likely remain constant. xi. They would not have to worry about a price cut for any retail outlet since they already have a solid clientele of suppliers who are buying their artifacts regularly. xii. Their work could remain constant with no increase in the amount of replicas being produced.d. Disadvantages xiii. Fenix could lose the large increase in additional sales tax income that the mass merchandiser chain could help them achieve. xiv. The company could lose potential sales due to competition in the replica business if they dont accept the contract. xv. They would not be able to capture a broader target market.V. RecommendationAfter careful compend and consideration of Fenix del Surs business foundations, I feel that it would be best to reject the contract at this prime in time. Reviewing the advantages and disadvantages above, along with assessing Fenixs current business definition led me to this conclusion. The companys current sales revenue is about $25million, and has had steady sales growth for the past ten years with an annual increase of 20%. This large annual increase in sales can be greatly attributed to their core competency of being able to accurately verify the authenticity of South American and African artifacts. Over time, Fenix del Sur has established a national reputation as one of the most respected sources of these types of artifacts.Aside from their solid sales growth, Fenix has established great relationships with the specialty dealers and exclusive department stores that sell their products. Building solid relationships with clients is a process that takes a lot of time and attention. Without these relationships, Fenixs sales would drastically decrease, possibly causing them to go out of business. Because the company has been selling to selective types of retail outlets, the end consumers (collectors) are very loyal to continually buying Fenixs products.If Fenix del Sur accept the contract, they would have to completely reposition their brand and business definition to include both replicas and authentic items. Because they are not in any peril of losing sales at this point in time, it would be wise for the company to continue business as they normally do. Just because an external opportunity exists does not mean that Fenix should take advantage of it. It bes as though the sales manager is very focused on the potential to add $4million in additional sales revenue. Although this may sound dandy at first thought, it is always wise to consider where the business stands at the present.Overall, the contract is too demanding on Fenix. The companys prices seem to already be accepted by the specialty dealers and exclusive department stores therefore, cutting their prices by 10% for one retail outlet will lea d to relationship issues down the line. These long-term relationships that have taken years to nurture could be gone in a matter of months. Also, because Fenix is known for authentic artifacts, increasing their production of replicas three times would create a disruption in their normal way of doing business. Again, this would displume Fenix del Sur to reposition its brand possibly losing a lot of clientele in the process.