Electronic appliance manufacturer - MyConsultingCoach
Case

Electronic appliance manufacturer


Case prompt

Our client is a national appliance manufacturer and retailer. The company specialises in premium small kitchen appliances like mixer grinders, blenders, juicers, toasters etc.

The company has been seeing a consistent decline in its market share across the country.

They have asked us to help them understand the reasons for the decline and suggestions for growth.


Detailed solution

Paragraphs highlighted in orange indicate hints for you on how to guide the interviewee through the case.

Paragraphs highlighted in blue can be verbally communicated to the interviewee.

Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Case exhibits” section.


Suggested case structure

Key question: Why is the market share declining?


Allow the interviewee to lay out a long list of factors he would like to analyse. If the interviewee is stuck or is unable to list out the various factors, prompt him to think of the value chain of the company.



The interviewee might list down all or some of the following factors: 
  1. Market: Quantum of market share drop, industry growth
  2. Competition: Competitor activity, entry of new competitors
  3. Product: New product or feature launches in the market
  4. Distribution: Current distribution channels, changes in distribution channels
  5. Marketing & Sales: Changes in prices, marketing strategy, marketing mix, competitor pricing and marketing strategy trends
  6. Consumers: Consumer behaviour, price sensitivity, customer complaints
  7. After sales service: Service infrastructure, changes if any


1. Background information

Share the information on the different factors only when requested by the interviewee.  If the interviewee has missed listing down any of the critical factors when he created the long list, share the information on the factors that he listed down and then prompt him to think of the missing pieces.


Listed below is the background information on the critical factors. Share this verbally when requested by the interviewee.

Market

      • The overall kitchen appliance market has been growing at 10% year on year
      • However, the company’s market share has fallen from 35% to 23% in the last 4 years.
      • There have been no major acquisitions or mergers in the industry

     

    Consumers

        • The customers are not very price sensitive
        • The brand recognition of our company is not very strong
        • Customers are influenced by the sales staff at the multi-brand outlets to a large extent. The sales staff typically explain the various features of the products and also comment on the after sales support of the various brands

       

      Competition

          • There have been no new competitors in the premium appliance segment
          • However, the mid range appliance segment has been gaining market share

         

        Product

            • There have been no significant changes in product features or technology in the past few years

           

          Marketing and Sales

              • The company has not changed its prices
              • There have been no significant changes in the marketing strategy & expenditure of the company
              • There have been no significant changes in the prices or the marketing strategy of competitors

             

              Distribution

                  • The company distributes its products through multi-brand outlets and self-owned outlets. The multi-brand outlets contribute to 90% of the sales.
                  • The multi-brand outlets have recently started their own in-house range of kitchen appliances. These brands compete in the low and mid range segment.

                 

                After Sales Service

                    • Our company depends on an outsourced provider for its after sales support
                    • Most of the competitors also work with outsourced providers. Some of the competitors have invested in the after sales providers
                    • The after sales support of the distributor owned brands is above the industry average. Because of their retail operations, they use a mix of in-house and outsourced providers.

                   


                  2. Key observations

                  The interviewee should come to the following key insights based on the data shared with him: 
                  1. The main reason for the drop in market share is due to the launch of in-house brands by the multi-brand outlets, which are the primary distribution channel of the company
                  2. The company is heavily dependent on the multi-brand outlets (90% of sales)
                  3. Although the customers are not very price sensitive, the multi-brand outlets influence sales to a large extent by explaining product features etc.
                  4. Multi-brand outlets now have an incentive to push their own brand, as the margins on in-house brand would be higher than those on the sales of other brands
                  5. The sales staff at multi-brand outlets would most likely use the better after sales service performance of their in-house brand as a strong pitching point
                  6. The low brand recognition of our client prevents it from attracting customers

                  3. Final recommendation

                  Allow the interviewee to list down the various recommendations. If he misses a key point, prompt him to think around that factor.

                  The interviewee should list down some of the following ideas to reverse the trend of market share loss: 

                  The client may evaluate:
                  1. Increasing its self-owned store network in order to reduce dependency
                  2. Having a company product promoter present in the key multi-brand outlets
                  3. Launching a marketing program to improve its brand recognition
                  4. Investing in one of the after-sales service providers to improve its performance
                  Exhibits
                  This case doesn't have any exhibits.
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