Crafton industries inc Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Crafton industries inc Case Study Solution

Alternatives:

Alternative 1: Whole Sale and Retail Consolidation

Pros:

It would allow both retailers and wholesalers to work collaboratively, resulting in added opportunities such as competitiveness and greater market reach.
It would lead to reduced service charges and freight expenses and transactional costs.
With consolidation, the company would be able to better focus on securing all the potential risks throughout the process of the supply chain.
It would lead to a strong and positive relationship with the supplier, and they would get a larger price of the share of the market.
Cons
It would require a collaborative mindset as it could increase the complexity of coordination and collaboration.

Alternative 2: Direct Distribution

Pros:

It would lead to reduced intermediary expenses in terms of service cost and commission
It would improve the direct contact with customers and the company would be able to provide better customer support in the shape of better product knowledge, reduced wait times to get the answer, & more sympathetic responses to the customer’s complaints.
The company would have more control over how to promote and deliver the products to the customers.

Cons

It would lead to increased internal workload including customer service, marketing tasks, chasing down defaulting customer and late-paying customers, fulfilling orders, processing payments and taking orders.
It would be complex for the company to manage the distribution logistics

Alternative 3: Forward Integration

Pros:

It would give a competitive edge over the market rivals as it would allow the company to make a considerable amount of investment in developing a product that is currently offering in the market.
It would lead to positive differentiation as it would give access to more production processes, inputs, distribution resources, and retail channels.
It would offer more control over the cost of product distribution.
It would offer more control over the business as the company would have more control over how to offer their product to the customers.

Cons

It would lead to problems related to capacity balancing.
It would require a considerable amount of investment and time to hire new employees, purchase a new facility, control new facilities, etc.
It would reduce the flexibility that the company usually enjoys working with suppliers and vendors.

Decision Criteria:

Attributes	Alternative 1	Alternative 2	Alternative 3
Increased sales	8	7	6
Customer loyalty	9	6	6
Market share	8	7	5
Profitability	9	7	6
Total Score	34	27	23

Recommendation:

Considering the analysis of the marketing trends and organizational analysis, the changes in the industry dynamics had represented three distinct changes. The analysis of each of the optionsbased on the attributes that are required for the successful growth of the organization represented wholesale and retail consolidation as the best option. Based on the financial analysis, the indirect distribution of the product i.e. through wholesalersis considered as the best alternative option to continue with its services. Therefore, Crafton is recommended to continue the sales of its products through wholesale and retail consolidation. But, it suggested to keep the focus entirely on wholesale distribution.

Through the shift of the distribution to an indirect channel, the sales of the products are expected to increase. In order to make this an effective strategy for implementation, the organization is recommended to create brand awareness through the use of social media marketing platforms. As the business across different industries tends to demonstrate the use of digital technological approaches.

Conclusion:

Crafton Industries Inc. operates in the United States demonstrating an approximate sales of about $75 million in the year 2010 with a net profit of about $3 million before tax. Due to issues faced by the organization, it is recommended to continue with the wholesale and retail distribution channel with great focus on the wholesale distribution i.e. indirect. This will significantly result in increased sales and create brand awareness through social media platforms to reach the target market not only in the United States but at the international level...................................

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