Kaviari: Pure Caviar Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Kaviari: Pure Caviar Case Solution

Threat of New Entrant:

The threat of new entrant was expected to be high, because France had only farming tanks and it lacked the presence of freshwater farms. France provided each player with a significant room in the market. Similarly, there was a requirement of large investment and large amount of operating capital.

Threat of New Substitute:

The substitute products of original caviar included the sale of salmon caviar,which was currently offered by one of the competitors, i.e. Laberyrie. Similarly, canned products and smoked salmon might have also been offered by the players in non-caviar category, as offered by Kaviari itself,contributing to 23 percent of its sales.

Kaviari’s Supply Chain:

The supply chain network of Kaviari was based on the import and distribution of its product mix, which included caviar and seafood products. Around 75 percent of the products were distributed through 75 percent retailers and 25 percent to wholesale intermediaries. The purchase of caviar by chefs included top star ones who buy caviar either through wholesale channels or retail stores contributing to 80 percent of the caviar sales. The mostly preferred channel for the purchase of caviar was finding food stores that were expected to grow at the rate of 4 percent. However, the main distribution channels in France included large retail outlets, such as hard-discounters, convenience stores, hypermarkets, and supermarkets. The products were primarily marketed to clientele who look for high-quality products. In supply chain, repackaging of caviar was value added to bring a significant improvement in the knowledge of supplier about the market, competition, and sourcing of raw material (caviar) to the retailers.

Current and potential marketing activities:

The marketing activities or policies implemented by a majority of the players in the market were not consumer-oriented. But, companies mainly targeted the distribution professionals such as: Labeyrie. Many companies relied on intermediate distribution for marketing as well as branding through different channels, like: chefs, fine food stores, and others. Among all the the marketing channels in France, upscale restaurants and fine food stores were highly targeted by all the seven leading players in the country.

Availability of financial resources:

The availability of financial resources is primarily based on the amortization of the fixed cost to be able to make investment in sustaining the business position in the market. Because, when the business operations were initiated;Kaviari was the largest trader and importer of caviar. But, the position of Kaviari in the market is now far from few players in the market, such as:Petrossian, Kaspia, and Comptoir du Caviar.

Alternatives:

Alternative 1 – Maintenance of current position

Maintenance of current position might badly influence the current position in the market because of the competition’s high level, as consumers look for improvements in old products and launch of new products, which improve the brand image in the market. Similarly, a shift to an advanced technology and economic distress might threaten the successful positioning approach of the business, i.e. premium service and customized caviar.

Alternative 2 – Move to down-market

Moving to down-market would significantly require lowering the product price, which might improve the sales. But, lowering product price would create doubt regarding the quality of product, among the customers. This means that the brand would be perceived as a low quality and cheap brand. Lowering the prices of special occasions would serve as a promotion strategy,which would lead towards the creation of surge sales during that particular period.

Alternative 3– Move up-market and cultivate a fancier image

The approach to move up-market would result in generating higher profit margins. It would also bring an improvement in the brand image and value of the business in the market. The ability of the business to successfully control its sales through the premium pricing, would allow it to gain a competitive advantage, making it difficult for other players to meet the product quality offered.

Recommendation:

Based on the analysis and the evaluation of the alternatives to make investment in;the business is recommended to move to up-market and to offer low-price in particular occasions.It is so, because the business already operates in premium category and has less threat of competition in terms of premium pricing. Similarly, consumers have no issues with the product’s price,because none of the consumer reported the prices to be very high. Additionally, the purchasing power of connoisseurs is relatively higher to consider it as the target customer base. It would also bring an improvement in the brand’s visibility, marketing and reduced competition threat.(Mohammed, 2018)

Conclusion:

Based on the concerns for the business to consider; the opportunity of connoisseur-sand shifting to inexpensive caviars have been analyzed. The analysis shows an increased probability to sustain the position in the market by focusing on connoisseurs due to high purchasing power and to retain its premium pricing strategy.....................

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Kaviari: Pure Caviar Harvard Case Solution & Analysis