Fe Nix Del Sur

Fe’nix del Sur Case Study

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With any organization, the constant of change is something that must be dealt with continually. While it may be possible for an organization to enjoy long periods of success and growth without threat to the status-quo, conditions will eventually change that will require adaptation. This is clearly the case with Fe’nix del Sur, an international importer and distributor of South American and African artifacts. Over the past ten years, Fe’nix del Sur has enjoyed 20 percent annual growth in revenue culminating in gross sales of $25 million. Market forces have turned, creating interesting circumstances for the company that started their small base
of operations in Tucson, Arizona before headquartering in Phoenix and opening branches in Los Angeles, Miami and Boston. These changes in the market place have created a number of challenges for the company. Prior to delving into these specific challenges, it is first important to analyze Fe’nix del Sur to formulate a case analysis. Kerin & Peterson (2010) detail the four analytical categories of a market case analysis, which can be clearly applied here:
1. Nature of the Industry, Market & Buyer Behavior: Fe’nix del Sur specializes in authentic artifacts sourced from tribal regions of South America and Africa. In addition, they also delve into Hopi and Navajo pottery and jewelry. They market these high-end exclusive items through a network of specialty dealers to consumers who are interested in expensive and unique relics. Competitively, the organization’s products are in finite supply and competition has developed from other vendors and even the existing distribution channels.
2. Organization: The organization’s primary objective is to capitalize on its distinctive core competency, carefully verified and authenticated relics, by selling them at high profit margin to discerning end-users. Recently, a market for replica artifacts has opened up for consumers interested in decorative and gift items.

3. Plan of Action: Responding to increased retail competition, Fe’nix del Sur is seeking to protect and expand their perennial supply of authenticated artifacts in addition to expanding into the replica market. Distribution chain opportunities are being carefully considered for exclusivity and guaranteed contracts.
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Potential Outcomes: Fe’nix del Sur can strive to secure sourcing for authentic artifacts and work on exclusive and guaranteed distribution channels to protect existing margins and levels of growth. In addition, Fe’nix del Sur can explore the replica markets to expand market share. Failure to protect current markets and proactively develop new markets will result in continued erosion of sales and margins.
With this cursory market analysis, several decision points are evident for the organization. One of the primary decisions Fe’nix del Sur has to contend with is the opportunity for a mass-merchandise department store’s offer to eliminate a competitor’s products from their store and go exclusive with Fe’nix del Sur. Utilizing the DECIDE process to analyze this challenge, we can increase the likelihood of a better solution (Kerin & Peterson, 2010): D) Defining the Problem: Fe’nix del Sur has the opportunity to contract with a mass-merchandise department store to market both authentic and replica items that could radically affect sales and how the company defines itself. E) Enumerate the Decision Factors: A guaranteed initial purchase of $750,000 with an estimate of $4 million of annual sales, with replica artifact production increasing by
300%. C) Consider Relevant Information: Commitment to a large percent increase in replica sales is a departure from the mission, scope and objectives of Fe’nix del Sur. I) Identify the Best Alternative: From my perspective, the market appreciation for replica items and the associated margins dictate that the new opportunity should be accepted. D) Develop a Plan for Implementation: Marketing the relics as direct replicas of Fe’nix del Sur exclusives will continue to differentiate the company from their competition. The replica endeavor can serve to bring value and notoriety to the authentic market. E) Evaluate the Decision & Process: The immediate infusion of $750,000 and anticipated increases of $4 million can ease the pain of redefining the company. Periods of re-invention can serve to motivate and inspire organizations to new levels of achievement. Understanding the segmentation of the market that Fe’nix del Sur competes in is an important component of defining which direction the organization should go.
As Stephan Liozu (2014) posits, one-size-fits all approaches regarding segmentation are simply not relevant anymore. Leveraging the existing network to increase the value of both the replica and authentic lines should be carefully approached by the organization. Competition and legal issues for the sourcing of authentics is contributing to that particular market becoming increasingly segmented. In addition, dilution of the replica market with low-quality knock-offs is a huge challenge to that market segment. As Liozu (20140 states, getting in front of the right customer with the right offering at the right price is paramount to
success. This leads us to the necessary challenge of identifying potential target markets for Fe’nix del Sur. As mentioned before, the markets are clearly segmented. For one, high-end clientele who have significant disposable income and a taste for authentic tribal artifacts are the primary market for the certified and verified relics. The second target market, which is the one that is becoming diluted by low-priced and low-quality competitors is the replica market. People are using these replicas for gifts and decoration. While not attempting to copy the competition, Fe’nix del Sur could learn from their completion by analyzing what their marketing efforts are and what type of people they are targeting (Sherlock, 2014). It is not necessarily a case of “If you can’t beat ‘em, join ‘em” but more a case of knowing what your competition is good at and then finding a way to do it better. With all of that being said, regardless of the decision to dive completely into the deep end of the replica market, Fe’nix del Sur should make all of the efforts necessary to protect their status as the pre-eminent supplier of authentic South American and African. In the end, the distinctive competency of being the most respected source for these types of artifacts is what put Fe’nix del Sur on the map and has contributed to sustainable success. As was alluded to before, perhaps entering into the replica business under the flag of Fe’nix del Sur can bring increased value to the replica products. However, careful consideration should be given to find a means to protect the value of the authentic products and the Fe’nix del Sur brand. The estimates that the mass-merchandise department store has given the organization sound great, but it is important to remember that people tend to be over-confident regarding the accuracy of estimates (Brown & Hyer, 2010).

References

Brown, K., Hyer, N. (2010) Managing Projects: A Team-based Approach. New York, NY: McGraw Hill

Kerin, R., Peterson, R. (2010) Strategic Marketing Problems: Cases and Comments (12th ed.) Boston, MA: Pearson Education.

Liozu, S. (2014) The Power of Segmentation. Smart Business Pittsburgh, 21(7), 6. Retrieved December
12, 2014 from http://web.a.ebscohost.com/ehost/detail/detail?vid=9&sid=8c96750c-049e-414f-aec2-a 7ca5083449d%40sessionmgr4002&hid=4114&bdata=JnNpdGU9Z Whvc3QtbGl2ZSZzY 29wZT1zaXRl#db=bth&AN=99812865

Sherlock, T. (2014). 3 Keys to Identifying Your Target Audience. Promotional Marketing, 1. Retrieved December 12, 2014 from vid=7&sid=8c96750c-049e-414f- aec27ca508344 9d%40sessionmgr4002&hid=4114&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&AN=99646565