Quilts Of Denmark: Managing Open Innovation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Quilts Of Denmark: Managing Open Innovation Case Study Analysis

Alternative 2: Add a premium product in its portfolio based on new technology

Another alternative presented to the company to address the emerging issue of positioning and pricing of the new TempraKON is to add the premium product in its product portfolio on the basis of the new technology. The alternative seems attractive to the company as the owners could look at adding the premium product based on new technology because it would allow the company to drive the higher value proposition, entice the customers to try new product and allow the company to win business from market competitors and threatens them byoffering exceptional quality services. Additionally, it would not lead towards the chaos and confusion among customers as they would be able to perceive the benefits of the product based on the technology. Additionally, the company would be able to set the premium pricing for the high-tech product which offers variety of benefits to the users. Since the manufacturing of the new TempraKON required considerable amount of investment, it would be extremely challenging for the marker rivals to offer the competing product at the similar price point without investing any amount in marketing.

Recommendation

After taking into consideration the deep analysis of the available alternatives and weighing them based on advantages and disadvantages; the company is recommended to go with the option two and add a premium product in its portfolio, on the basis of the technology. Although, the risk is attached with this option as there is a possibility of failure of the new product in the market.The company could be threatened from the product cannibalization.This alternative has promising advantage because of the fact that the previous TempraKON products were successfully launched and yielded healthy returns to the company and if the company would change the pricing strategy and sell the products directly to the retailers; it would result in loss of the customers as they would become confused about the product, which the company could not afford at this point as it is struggling and is still a young company due to which every single move could positively or negatively affect the reputation and profitability of the company in both short as well as long run. Also, the option would lead to an increased sales, high value proposition, competitive advantage and high profit returns.

Implementation Plan

To implement this, the company should define its target market and go with an extensive market research, which includes: population trends, their spending pattern, strength and number ofmarket competitors, trends in the salon industry. Additionally, the company should project themarket share when expanding a similar business model intoa new market. It could also use theCAGE distance framework and conduct PEST analysis to identify the threats and opportunities inthe market. It should also use the marketing mix in order to understand how to position thebrand in the market. Furthermore, it should use different channels of sales, such as: direct andonline sales. By doing so, the company would be successful in improving its brand recognitionand maximizing its market share. The key steps for the implementation of suggested alternative willprimarily include: