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Essay on Fe'Nix Del Sur Case

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I. Problem Statement A. Fe’nix del Sur must decide if they want to work with the mass-merchandise department store by tripling its replica production in order to potentially add $4 million in additional sales.

II. Industry Analysis A.

B. Fe’nix del Sur mainly competes in the Authentic-Collector category; however, the Replica- Ordinary category is beginning to grow in the artifact market.

III. Organizational Analysis A. Fe’nix del Sur is a limited liability company that sources and sells a wide variety of artifacts, jewelry, and pottery for collectors. 1. Fe’nix started as a trading post in the early 1900’s and are now a reputable dealer in the southwestern pottery and jewelry market. 2. Their distinctive …show more content…

a. If we accept the contract we will lose our exclusive reputation to our current retailers, shifting our business definition to focusing on the replica market with ordinary customers as opposed to our main focus of authentic pieces and collectors.

IV. Alternatives A. Accept Contract 1. Advantages a. There will be a potential to add $4 million in sales annually. b. Fe’nix can reach a new market among the mass-merchandise stores consumers. 1. These customers are a different segment than those who shop at the exclusive department stores. c. Replicas can be a long-term opportunity because at some point you will have to run out of authentic. 2. Disadvantages a. Tripling our production of replicas to satisfy contractual obligations can potentially hurt our reputation as a trusted source for authentic. b. Losing our “exclusiveness” because now anyone can buy a Fe’nix del Sur product. This could make them less appealing to those who want something original like our collectors. c. The contract states that it would buy at 10% below the company’s existing prices, which means we would have to accept a price cut. B. Reject Contract 1. Advantages a. We will not be compromising our reputation which is part of our distinctive competency by refusing this contract. b. We hold onto control of our products and are not obligated to make a number of

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