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Foxy Original: The Online Expansion Case Solution

Introduction

This case introduces Foxy, which is a company owned by two partners engaged in the designing and manufacture of jewelry products that are sold and distributed to the public of the United States and Canada through different retail stores. It designs various jewelry designs so as to appeal to the different tastes of the customers to enhance its sales revenues and profitability in the market. Furthermore,the company focuses on selling joyful and exciting products to its customers which are of high quality as well as affordable. This is done so that the company could enhance and maintain its customer base while increasing its customer retention rates, which would result in the company increasing its sales margins and profitability statement. As a result, it could ensure its survival in the highly diverse and competitive market without compromising its ability to ensure its going concern.

The dilemma faced by the company is that as both the partners are now married with kids, they will not be able to devote the same amount of time to effectively attend the trade shows that are used to secure retailers to carry the product line of the company, which, in turn,would affect the company’s profits.

Currently, the primary area of operation of the company is US and Canada where the US contributes in generating 70% of its sales whereas, the online sale represented 15%in 2013. On the other hand, Canada accounted for generating 90% of the company’s sales in 2007.

The owners of the company were constantly trying to find new and innovative ways for their products design and quality, which would enhance the products’ appeal towards its customers so that the company could increase its economies of scale and profitability in the market to better align itself to ensure its growth, further increasing the company’s share in the market.

Problem statement

The primary issue faced by the company is that the partners are considering expanding into the online sale market which would enable the company to offer its products worldwide. However, because of the limited resources available to the company, the company could either choose to properly market the online expansion or its current retail distribution.

Strategy

The company has implemented effective and efficient strategies to increase its customers’ satisfaction levels. The main motto of the company was to provide its customers with an exciting product that would increase the economic utility of the product for the customers. Furthermore,it aimed to provide its customer with an affordable yet high-quality product which would increase the satisfaction level of the customers resulting in gaining potential customers and in increasing its customer retention rates, which would enhance its sale margins and profitability statements.

Success factors

The primary success factors for the company are its strong relationship with its retailer which would carry its product line to the customers in U.S and Canada. Furthermore, the owners of the company are dedicated to drive the organization through innovation in its products design top gain competitive advantage so that it could maintain and sustain its market share. Moreover, the owners’ relative experience in the jewelry designing and manufacturing industry from a very young age tend to increase the company’s potential for success in the highly diverse and competitive market of jewelry design as the owners were well averse with the current market trends in women’s fashion and could predict the changes and their potential impact on the economic condition of the company.

PEST Analysis

Moreover, analysis of the case and a PEST analysis of the company has been performed to determine the impact of political, economic, social and technological and environmental factors on the company in its areas of operations.

Political:The political factors faced by the company in its area of operations are given below.

  1. The United States has a strong infrastructure and democratic set up.
  2. The U.S government implements effective rule and regulations.
  3. The U.S is one of the strongest economies of the world.
  4. The U.S has high currency value
  5. Canada has stable political environment.
  6. Canada implements effective constitutional laws.
  7. Canada has a liberal tradition.

Economic: The economic factors faced by the company in its areas of operations are given below.

  1. S is the largest economy in the world.
  2. S GDP is over 16.7 trillion dollars.
  3. Economic systems are well established and Comprises of mostly manufacturing and services industries.
  4. The financial crisis of 2009 adversely affected the U.S economy.
  5. Consumer and businesses are spending tremendous amounts in the U.S
  6. Canada has the 10th largest economy in the world.
  7. Canada GDP is 1.758 trillion Canadian dollars.
  8. Canada GDP growth rate is 2.4%.
  9. Canada GDP per capita is $51,147.

Social:The social factors faced by the company in its areas of operations are given below.

  1. The U.S mostly compromises of an aging population.
  2. The U.S comprises of many diversified group of people with different ethnic backgrounds and culture.
  3. In the U.S the population consists mostlyof liberals.
  4. Canadian population consist of a sense of belonging.
  5. Canadian population is based on community participation and volunteer activities...............................................

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