Case Study Steelco
| Steelco | | | Week 3 | Case Analysis of Marketing | | |
Steelco
Case Analysis of Marketing
Introduction
The so-called I-beams are a standard element in modern construction used to build e.g. bridges, stadiums and super high-rise buildings. The I-beam market can be further segmented into small size beams up to 14-inches, in which a number of firms are active and a kind of perfect competition is taking place. As for the 14-inch to 24-inch range only Steelco and USX remain in an oligopoly. Above 24-inches though, USX holds a monopoly. Looking at the steel wide-flange beams in the US as a whole, one can see that Steelco and USX are the two major oligopolists. With Steelco pushing into the large range sector, ideally it can gain a comparatively large amount of market share from USX, as well as being able to exploit the over 36-inch segment in which it would hold a monopoly. Its lead-time would also be great since converting plants and production is costly and time consuming. The large size I-beams might actually be a breakthrough in modern construction enabling the construction of larger and more sophisticated buildings that could e.g. include unsupported overhangs.
After the disastrous launch of Steelco’s new product, the question is where lies the mistake? The report will focus on two possible causes: 1. Evaluation concerning the product 2. Promotional issues
Analysis
The basic framework of analysing new products is to analyse the external environment, customers, competition, resources & capabilities, segment, target, position (STP), and the 4Ps. As the external environment, inter-industry relationships and STP have been covered above, investigating the 4Ps is the main concern.
Looking at product and promotion issues makes good sense since there is no ambiguity related to either the place or the price in Steelco’s marketing mix.
The reason for this being that the channels used in the steel industry are set in the sense that
Steelco
Case Analysis of Marketing
Introduction
The so-called I-beams are a standard element in modern construction used to build e.g. bridges, stadiums and super high-rise buildings. The I-beam market can be further segmented into small size beams up to 14-inches, in which a number of firms are active and a kind of perfect competition is taking place. As for the 14-inch to 24-inch range only Steelco and USX remain in an oligopoly. Above 24-inches though, USX holds a monopoly. Looking at the steel wide-flange beams in the US as a whole, one can see that Steelco and USX are the two major oligopolists. With Steelco pushing into the large range sector, ideally it can gain a comparatively large amount of market share from USX, as well as being able to exploit the over 36-inch segment in which it would hold a monopoly. Its lead-time would also be great since converting plants and production is costly and time consuming. The large size I-beams might actually be a breakthrough in modern construction enabling the construction of larger and more sophisticated buildings that could e.g. include unsupported overhangs.
After the disastrous launch of Steelco’s new product, the question is where lies the mistake? The report will focus on two possible causes: 1. Evaluation concerning the product 2. Promotional issues
Analysis
The basic framework of analysing new products is to analyse the external environment, customers, competition, resources & capabilities, segment, target, position (STP), and the 4Ps. As the external environment, inter-industry relationships and STP have been covered above, investigating the 4Ps is the main concern.
Looking at product and promotion issues makes good sense since there is no ambiguity related to either the place or the price in Steelco’s marketing mix.
The reason for this being that the channels used in the steel industry are set in the sense that