Colorscope Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Background

Andrew Cha, a specialist in graphics and designing started his company with the name of Colorscope in 1976 after years of hard work and through experience gained from working with different companies. Colorscope has a diverse portfolio of customer ranging from walking customers to long term committed loyal customers comprising 80% of its total customers.

colorscope case solution

The operational process at Colorscope started from receiving orders from customers; these orders were mostly related to magazines and some other art & graphics work as well. All the specification and design requirements were recorded on the phone call, and then the job owner who recorded the role does the job preparation that consist of creating templates by physically cutting & pasting Text, Graphs & Photographs and special effects were also included at an additional cost. Then in the next step of production process, template pictures were digitalized and scanned. Then the job was sent to assembly division where operator changes the color and shade scanned images as per the specification of the customer. After that, the job was finally sent for quality control and if the job was not as per the specifications of the customer then it was sent back to a specific process for re-work, which means that all the following processes have to be repeated for that particular job. Once passed from QC department, the job was completed.

Problem Statement

Retaining the current market share is the main problem that is faced by Colorscope. It is because of the tight competition, quality of work done and partly due to the prices charged to customers, coupled with the absence of some internal controls.

Analysis

Porter Five Forces Model

The porter five forces model examines the market conditions with respect to the ease of doing business. It examines the extent to which different market forces are capable of driving demand and controlling profit terms for the companies in the market. It also determines the extent to which external forces may affect the performance of companies in the respective market.

Threat of new entrants is high

The overall threat of new-possible participants in the graphic and design industry of US is high. This is because of the rapid change in technologies desktop publishing and the World Wide Web has opened the industry for new firms. Moreover, it is also because of the diverse range of products.

Bargaining power of buyers is high

The economy and the financial system of the country are getting better day by day. New technologies are introduced that changed customer's specifications, which mean that there are different market segments with different preferences. The greater competition from the local companies provides product at lower prices and with a great deal of varieties, hence, the bargaining power of buyers is high as a result in of this price war.

Bargaining power of suppliers is medium

The bargaining power of suppliers is medium. The reason for the medium buying power is that these suppliers and companies both go for strategic alliances. Since, the supplier is an important aspect to attain overall success, so the company always tries its level best not to lose that supplier so that the quality standards can be consistent. Similarly, a supplier always tries his level best that its strategic alliance with an individual company should be aligned and run smoothly without any hurdle because when a supplier loses a contract so he will face some serious failure and loss of market reputation for sure. Keeping in mind all these factors, the suppliers bargaining power is medium; here the positive aspect for supplier is that in US the graphic and design sector is flourishing in a rapid pace; therefore, he can look for more customers from which a strategic alliance can be created.

Degree of competitive rivalry is high

The competitive rivalry in the graphic and design industry is high. It is because of the new methods that have made large domestic competitors more technically strong printing companies with highly expert sales staff pushing bundled pricing, incorporating pre-press services with printing in a distinct package, such as R.R. Donnelley & Sons Co. and Quad Graphics. These competitors compete head to head in the national markets. The main competing aspects are price, variety and quality differentiation.

Threat of substitution is high

The threat of substitution is high because there are so many other substitutes of printing and graphics products due to innovative technologies. There was a essential alteration in the market. It was difficult for Colorscope to maintain its previous position as a high quality and high service player because of other firms that were providing the same quality at lower price.

SWOT Analysis

Strength