Fortis Industries, Inc Case Analysis
1. Why is Fortis losing market share?
Because Fortis has been facing strong competition since 2002. Other players initiated price war and Fortis refused to continuously cut its price, which caused Fortis to lose market share to its competitors. 2. What is Fortis's current marketing strategy?
Fortis emphasizes value-added service to customers. The company was unwilling to use price weapon but provides specialized service and equipment to meet unique strapping needs. Their marketing strategy focuses on customer price sensitivity and its relationship to the service component of Fortis's value-added system. 3. What is the significance of Exhibit 8?
The chart put together customer price sensitivity and the service cost of Fortis. Each location of point reveals the characteristic of a single customer regarding the magnitude of difficulty to meet its requirement.
The upper-left customers are the best ones who provide highest value to Fortis while the lower-right customers are the worst ones.
The upper-right and lower-left customers are average customers but have different preferences between price and service.
With the analysis from Exhibit 8, Fortis can classify its customers and exert different strategies to deal with different customers. The benefit to Fortis is that they may further understand customers’ characteristics and requirements, thus optimizing their resource allocation and increasing customer satisfaction. 4. What should George Reynolds do? A. Increase Fortis's strapping prices to offset the increased price of steel. B. Maintain Fortis's current book prices. C. Institute the price-flex proposal as outlined by Dennison.
Below is a table to assess the consistence of each choice with 4 goals. | A Choice | B Choice | C Choice | Maintain profitability | Positive | Neutral | Negative | Halt market share erosion | Negative | Negative | Positive | Provide cash to the corporation | Not quite sure to the overall effect |
Because Fortis has been facing strong competition since 2002. Other players initiated price war and Fortis refused to continuously cut its price, which caused Fortis to lose market share to its competitors. 2. What is Fortis's current marketing strategy?
Fortis emphasizes value-added service to customers. The company was unwilling to use price weapon but provides specialized service and equipment to meet unique strapping needs. Their marketing strategy focuses on customer price sensitivity and its relationship to the service component of Fortis's value-added system. 3. What is the significance of Exhibit 8?
The chart put together customer price sensitivity and the service cost of Fortis. Each location of point reveals the characteristic of a single customer regarding the magnitude of difficulty to meet its requirement.
The upper-left customers are the best ones who provide highest value to Fortis while the lower-right customers are the worst ones.
The upper-right and lower-left customers are average customers but have different preferences between price and service.
With the analysis from Exhibit 8, Fortis can classify its customers and exert different strategies to deal with different customers. The benefit to Fortis is that they may further understand customers’ characteristics and requirements, thus optimizing their resource allocation and increasing customer satisfaction. 4. What should George Reynolds do? A. Increase Fortis's strapping prices to offset the increased price of steel. B. Maintain Fortis's current book prices. C. Institute the price-flex proposal as outlined by Dennison.
Below is a table to assess the consistence of each choice with 4 goals. | A Choice | B Choice | C Choice | Maintain profitability | Positive | Neutral | Negative | Halt market share erosion | Negative | Negative | Positive | Provide cash to the corporation | Not quite sure to the overall effect |