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Chantal Cookware Analysis

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Case Analysis 2: Chantal Cookware

Chantal Cookware is a small, private company with a 15-year record of success in the design, assembly, and sale of high-end cookware. It experiences serious setbacks when consumers' tastes shift from colorful enamel-on-steel products to commercial-style cookware. How should Heida Thurlow decide how to revitalize the business? Your analysis should justify the recommendations among the several alternatives, including entering a lower-priced niche or repositioning the existing product line.

Please use the case “Chantal Cookware Corp.” (Harvard Business School case, no. 9-699-023).

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Solution Preview

CHANTAL COOKWARE
Chantal Cookware was founded in 1981 by Heida Thurlow. Thurlow loved to cook, which is why she was always interested in the cookware market. Chantal Cookware was conceptualized when Thurlow began searching for cookware with the quality and design that she could use in her kitchen. Taking inspiration from German cookware which used colored enamel she created her ideal set of cookware, combining elegance with function in the highest quality enamel on steel. Products designed included stainless steel handles, glass lids and teakettle with harmonica whistle. The cookware was distributed through different retail channels including small specialty stores, department stores, housewares chains, catalogs and discounters. When Chantal Cookware was in the growth phase, the retail industry in the United States was going through a major transformation. Earlier department stores controlled a substantial share of cookware distribution and large retail space to cookware. It gave then high volume and 40-50% gross margin. Also, it was through cookware that customers would come to the store and purchase other items also. This model was passé with its high cost structures and competition from specialty and discount retail chains. There were consolidations in department stores to make them more efficient by centralizing their buying operations. With changes in retail industry there were also changes in distribution and supplier networks servicing them.
Problems
• First sales came in easily but developing solid follow-on business remained a significant challenge. It created pressure for cash every now and then.
• The final product which was assembled in Houston consisted of handles from Scandinavia, lids from Japan, and the pots from Germany. This increased the manufacturing cost and put additional burden on cash requirement.
• Chantal's business with department stores was beginning to erode as traditional selling methods did not work in new environment. Chantal's was used to selling their products with attractive ...

Solution Summary

Recommendations to Thurlow for revitalizing Chantal's business are examined.

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