Minolta Camera Revised: Case Analysis
Problem Recognition
Minolta Camera Ltd is facing a ‘grey export’ problem in which the product of the company is exported to international market through an unauthorized distribution channel which is causing various disturbances in the market. Due to this reason, the product that has been provided in the market through an unauthorized channel are sold at cheaper rates than the product which has been attained through a legal channel. Along with this, the sales for Minolta which is attained from illegal channels or ‘grey exports’ is less than 10% of the company’s sales which is increasing annually which has created concerns for the parent company.
However, it has been confirmed that the problem for the grey export around the world is ignited in the Hong Kong region. The company is either required to take control over the distribution network, make a joint venture with a Hong Kong distribution company, or the price difference shall be eliminated.
Analysis
SWOT Analysis
Strengths
Minolta Camera is a leading manufacturer of still and movie camera with various camera accessories. The company has been exporting in the Europe and United States region and is not dependent for sales over a single region. Furthermore, Minolta Camera also provides sophisticated 35-mm single lens camera which have interchangeable lens for the various cameras with different models.
This product feature allowed the company to stand apart from its competitors. In total, the company have six manufacturing plants in which four plants are used for manufacturing cameras and lens, while the other two are used for other business machines and products. The company sold its products in more than 100 countries and had a policy of assigning only one distributor in each country.
Weaknesses
The distributors at Hong Kong Goddard have strong ties with its owner George Ho as the founder of Minolta Camera and George Ho were great personal friends. Therefore, the company is hesitant to resolve the matter with full intention, but it has discussed the particular matter with George Ho about grey export. Since George Ho does not care about the parties to which he sells the product, therefore little efforts have been made by George to resolve these issues.
Therefore, Goddard does not have any control over its distribution in Hong Kong which has been developing huge problems in various countries. Although the higher percentage of revenues from the export market is carried out from US and Europe, the company is also dependent on retailers as preference of consumers have been shifting towards the opinion of retailers, which ensures that the company would have to maintain strong ties with its retailers. The company also have standardized products across various regions with same product model and packaging.
Opportunities
The company have an option to gain strong control over the distribution of its product from the Hong Kong region. It is also an opportunity for the company in identifying which retailer in Hong Kong have an unexpected turnover ratio. Through this technique, the company would abstain from providing extra products to the particular retailer.
Furthermore, Minolta Camera also have an opportunity to consider a joint venture with Goddard because of gaining good control over its distribution in the Hong Kong region. The difference amongst the prices offered in the various regions could also be reduced in order to cater the particular problem.
Threats
The overall market share for Minolta Camera has been on the verge of decline because of the grey export which is resulting in an increased customer dissatisfaction due to huge price variance. Furthermore, the other reason for the decreased market share includes the intense competition from Nikon, Canon, and Asahi Pentax.
VRIO Analysis
Interchangeable Lens
The company offered a camera whose lens could be interchanged with other camera models of the company. The particular capability of the company is valuable since neither of its competitors have yet be able to copy the product. This core competency also makes it rare, but it is not costly to imitate and could be copied by competitors in the near future. Therefore, this core competency lies in the third quadrant which enables the company to achieve temporary competitive advantage.
Presence Over 100 Countries
The company has presence in over 100 countries while the largest part of its sales is achieved from US and Europe market. This core competency is ranked as valuable because being present in the international arena increases different ways to earn revenues for the company. However, this does not makes it rare because its competitors are emerging in the international arena to show their presence. Therefore, this has been placed in the second quadrant which provides the company with competitive parity.
Marketing Mix
Product
The product for Minolta Camera includes various still and movie camera along with the various lens which could be fitted in each of its cameras. The particular product features stands out from its competitors. Furthermore, the company also sold various camera accessories to its customers.
The product of the company varies in between simple cameras and professional cameras. The name of the product along with its packaging and its features are all the same from one country to another. The company also have problems in printing a brochure in different languages.
Price
The company offers various prices for its products as for a simple still camera it would charge a modest price, whereas, premium-priced strategy is charged for its professional camera. However, the internal price strategy varies greatly from one export destination towards the other. The countries which are nearer to Japan are most likely offer low prices to its retailers and to its end consumers against a retailer which is present in the United States or Europe.
The prices vary according to the landing cost of the product which includes its shipping cost. However, since the presence of grey export from one country to another, it has allowed companies retailers to sell Minolta products at very cheap rates which has created concerns for its consumers.
Place
60% of the company’s sales are achieved from outside the region of Japan and amongst which 45% of sales is attained from US region and 35% is attained from the Europe region. Minolta has wholly owned companies in the US and Germany region. The company sells its products through retailers who are either company-owned retailers or independent retailers. As discussed in the case, the retailers have a strong power in the selling of the brand as consumers decision is largely based on retailers’ responses. The company has a total of 25,000 retailers.
Promotion
The promotional strategies are also standardize across various regions as print advertisement which is developed from the Japanese market would be sent to different countries and shall be used the same. Therefore, promotional strategies have little effect on its consumers regarding making the purchase decision….-
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