Gemini Electronics Case Solution
What was the business model of Gemini? What were the key success factors that determined its past profitability? What are the risks Gemini is facing now?
Business model
Gemini has been running the business in an efficient way and has a perfect business model. The business model of Gemini is that it production is based on just-in-time, thus there is much cost saving as there is no need to keep inventory and bear high warehousing costs and procurement cost etc. this gives Gemini competitive advantage in the industry since with less cost it can tagged its products at much lower prices. Moreover Gemini, for its distribution purposes, caters only big box retailers such as Wal-Mart and best buy etc. These retailers wanted to cut-down their supply chain this will cause increment in the reliability and reduce the time taken to produce and deliver finish goods.
Key success Factors
The key success factors is that Gemini was offering products of high quality but with lowered prices as compared to its competitors, by use of policies already discussed. With lowered prices it capture higher market share in less time. Moreover it uses online local stores for offering its products to public this also causes higher sales.
Risks
There is a risk in face of expected competition that may affect the Gemini performance. Korean and Japanese companies have started to lower their prices so that the prices coincides with the Gemini’s products prices. However this is expected to be short term.
The major risk is the rapid growth in the field of technology and industrial advancement. There is introduction of 3-D TV by Sony this year and soon all major electronics giant will adopt such technology. Another feature is telephone video calling by TV and use of TV for some computer stuff like surfing web and email etc.
Another problem is that the company has to provide retailers with extended credit periods to compensate their concerns of customer choice to buy. This extended term was much higher than industry standard.
What is your assessment of the company’s recent performance and current position in the marketplace?
Recent performance
Gemini has, as per financial statements, it can be seen that the sales revenue has been increasing significantly per year with an exception in year 2009 maybe due to recession. Net income is has an upward trend. Overall company had been showing sales growth and efficiency in its operations. The company has already market share of 35 percent and has become largest TV producer of U.S. Company has also increases its efficiency and also outsource its larger share of parts to North America. Overall there was marvelous performance in the recent years.................
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