Fortis Industries Inc. (B) Harvard Case Solution & Analysis

Table 2:

PASS ON RAW MATERIAL COST

To pass on the cost to Fortis customer is not a viable option as it would reduce the market demand that would result in lowering the market share and it would alsoaffect the sales force target that would ultimately reduce the sales of the company. This loss not only attracts the competitors to lower their prices but also gives them a competitive advantage over Fortis and ultimately it would reduce the competency level of Fortis as well.

PRICE FLEX

For Fortis, Price Flex is a viable option as it would enable Fortis to increase their cumulative advantage over its competitors and it would also increase cash flows of the company.

Fortis would change the discount policy to whom it would be given either to senior staff or to the sales force. The beneficial option of discount is that, the discountshould be given to the senior staff as senior staff would only give this discount to Fortis’s potential customer that would bring the positive cash flows for the company in the long run.

If discount would be given to sales force than the sales force would give the discount to every customer making that particular sales force target more achievable. This would incur losses to the Fortis and Fortis would lose its potential cash flows in the long term.

SCATTERGRAM

The Scattergram is showing the potential of the each client that how much they are paying to Fortis for the services they have consumed. It also shows the amount of payment of the each client with respect to the services. If a client is paying more on small services than that particular client is more valuable to Fortis instead of those clients who are paying less and getting more services from Fortis. By doing so, it would allow the Fortis to easily identify that which segment is more valuable for Fortis, therefore it would be given more attention and which is less valuable, would be given less attention.

CHANGE IN PRICEING AND MARKET STRATEGY

For the change of the Pricing and Market Strategy, it is recommended that Fortis must identify that customer’s preferences are changing with respect to the change in the market and for that Fortis being a market leader,must stand and lead the market. Imports from foreign countries are dominating the market as these products are available at lower prices, but being the market leader Fortis must take a stand and lead the market in terms of differentiating its products from the foreign imports.

It is also recommended that, Fortis must facilitate its potential customers in terms of establishing the healthy relationship for the longer period of time until it gets to the Cash Cows position and this would only be done if Fortis manage its brand name independently.............................

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