Kookaburra Cricket Bat: Dealing with Cannibalization
Introduction
The kookaburra is a sports equipment manufacturer which was founded in the year 1890 by A.G Thomson and is named after an Australian bird. The company’s headquarter is based in Australia, where the company specializes in making cricket ball and bats for the cricket playing nations. The company makes endorsement deals with top cricket players and sponsor a junior cricket tournament Kookaburra Cup in order to promote its product.
The paper attempts to provide internal, external, and financial analysis for Kookaburra while providing recommendations to sustain long term profit maximization. The paper discusses the internal analysis through SWOT and VRIO analysis, whereas, the external analysis is carried out through Porter’s five forces model. Moreover, the paper provides the two alternatives for the problem statement along with their pros and cons. Lastly, the paper provides recommendations for the company.
Problem Statement
The kookaburra is in a paradox situation relating to the positioning of its new cricket bat brand that has outperformed the performance of its existing cricket bat brands. The company has two options of either position the new brand with a different brand name ‘Ready Kangaroos’ with a separate brand entity, or the company can launch the same brand by the name of ‘Kookaburra Kahuna Ready’under the Kookaburra Kahuna brand.
Case Analysis
Internal Analysis
SWOT Analysis
Strengths
The Kookaburra company has the ability to continuously innovate and to come up with new products all the time, which makes the technological aspects stronger for the company. Innovation drives a company ahead of its competition, which is the sole reason for Kookaburra dominating the world of cricket through its products. The company also targets the best players in cricket to endorse its brand, which is also the reason for the company’s high rated fan following. The company is successful in developing worldwide dealerships by making strategic alliances with different companies to make its product available in different parts of a country. The company also offers customized gearing for its consumers based on their height and weight.
Weaknesses
The Kookaburra has been facing tough competition with smaller competitors on the basis of price which are offering similar products. Although the innovation is provided by Kookaburra, but small competitors often copy the innovation and offer similar featured product at lower prices. Kookaburra has been weak in replying to the particular stance of smaller competitors. The Kookaburra company is often reported for the delays in replacement of its products when the warranty problem arises. Customer problem solving approach of the company is lacking which may place the company’s reputation at stake.
Opportunities
Consumers’ behavior regarding the purchase of the sports equipments are changing as it is being shifted towards buying customized products for their comfort. Online web portals are considered the best form of communication for companies to enter a certain market in which it is not marketing directly. The web portals may provide an opportunity for the end consumers in customizing their products according to their preferences. Better logistic strategies can allow the company in making its product available in different countries due to the popularity of cricket.
Threats
The major threat for Kookaburra is the increase of tax and duties on import which has resulted in further increase of the price of the product. The Kookaburra company positions its brand for an efficient consumer base which is why it lacks the ability to target the inefficient set of consumer base which is mostly targeted by small competitors. The company faces threats from small competitors because a large consumer base does not have the purchasing power to afford Kookaburra brands. The local cricketing bodies in different countries have been promoting cricketers to use local sports equipments for the promotion of their local brands and sponsorship affairs.
VRIO Analysis
According to the VRIO Analysis, the company has a great strength of innovation and introducing new products in the market by availing the first mover advantage. Therefore, the company lies with a temporary competitive advantage that reveals above average returns. Innovating a new product is valuable for the company and is also a rare quality found in this industry. However, the technology produced by Kookaburra is easily imitated and is cheaper than the original concept.
External Analysis
Porter’s Five Forces
Competitive Rivalry
A strong competitive rivalry can be found amongst different cricket bat manufacturers that have positioned differently in the market. Most common competitors are Adidas, Gray Nicolls, GM Cricket, CA, and Slazenger. Adidas is a multinational corporation for developing sports related equipments based in Germany. According to 2013, Adidas generated €14.49 billion in total revenues. The company also specializes in producing cricket bats from entering the market in the year 2008. Since then the company has launched various brands which include M-Blaster, Incurza, and Pellara..................
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This exercise is one of a series designed to help students learn how to perform financial calculations in marketing contexts. Kookaburra, a manufacturer of cricket equipment are popular in Australia, New Zealand, UK, South Africa and India, is considering two strategies for positioning a new bat for Cricket in India. Both strategies will cannibalize current sales, and Lulu Popplewell, category manager responsible for the Indian market, needed to calculate the financial implications for the definition of which it would recommend. This exercise is an imaginary problem of the branding strategy for a new product, and asks students to consider the financial implications of different strategies for branding and cannibalization rates. "Hide
by Julie Hennessy Source: Kellogg School Management 4 pages. Publication Date: 09 Oct 2012. Prod. #: KEL684-PDF-ENG
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