IMD-5-0688 © 2005
Ryans, Adrian
Local competitors in China were undercutting the price of the CompactTwister; which was manufactured in China; by over 50% of Saurer. The firm was considering the introduction of a lower price machine targeted at Asian and Chinese customers; who wouldn't purchase its high price machine.
Gross profits were likely to be lower on the new machine; and the new machine might cannibalize their high-end product. If the STS team did determine to introduce the new machine; it'd have to make some tough decisions about naming the merchandise; pricing; positioning; and sales strategy. It was also not clear how the projected new merchandise would be responded to by their Chinese opponents.
Saurer The China Challenge (A) case study solution
Subjects: China; Low-cost competition; Marketing; Strategy
Settings: China; Germany; Textile machinery; €1.7 billion; December 2003
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