Betty is the President and CEO of ATT Trophies, a producer of a variety of trophies, awards, plaques, medals, etc. ATT started out as a small, make-to-order order shop producing custom plaques and trophies. These products are typically ordered in small quantities of one to five units, with customized engraving commemorating some individual achievement.
In recent years, ATT has seen significant growth in demand for "standard" awards. These products are typically ordered in larger quantities, with no customized engraving. A soccer league, for example, may order up to 200 generic soccer medals, distributed as "participant awards" to all players in the league at the end of the soccer season. Similar awards are ordered for other league sports and various academic competitions.
While the customized products remain profitable, the standardized product lines have grown to account for about 80% of ATT's total business volume. The remaining 20% of their business volume comes from the customized products.
A new competitor, Awards R US, has forced ATT to re-examine their basic business model. Awards R US produces a competing line of standardized products, typically at lower cost and with shorter lead time than ATT. They do not produce any customized products.
Betty realizes that she needs to develop a strategic response to the challenges created by Awards R US' entrance into the market. She wonders whether she should try to compete in the standardized product market, the customized product market, or both. She also realizes she needs to think about any other factors that would impact or be impacted by this decision. Outline your response to Betty's questions.
She should compete in both the markets because customized products is a profitable business and ATT has a forte or edge in this segment due to long standing experience whereas standard awards market is a growing market and comprises of bulk of the business of the ...
Discusses the strategic response to the challenges created by Awards R US' entrance into the market.