Le Petit Chef Case

elevator pitch
Le Petit Chef faces a usual challenge: how to keep on growing on a mature market when differentiation though innovation is more and more expensive and profit tends to drop because of increased competition. Microwave oven has been a disruptive technology. For a mature technology, it is more a matter of optimizing the innovation triangle and implementing the right processes to align R&D, Operations and Marketing. Le Petit Chef needs to use synchronous innovation, to make sure their strategic positioning matches their processes and therefore their cost structure. They also might want to push for a disruptive technology like introducing fuzzy logic to sustain their competitive advantage.

What is the relevant context of this case?
Le Petit Chef enjoyed high margins until the position attracts both larger European players and Japanese competitors, eroding its competitive advantage.

What factors explain Le Petit Chef’s poor performance? What actions do you recommend to remedy this situation?
Le Petit Chef suffers from adverse external factors. The market becomes mature, and players naturally develop various strategies to capture the higher profit of the high end segment. Larger players are upgrading their product lines, while taking advantage of their larger scale and lower costs. On the other end, more and more features are becoming common in the low cost products.

Internally, Le Petit Chef seems to face a maturity crisis. It becomes too big to be as differentiated and as reactive as it used to be, and it is still too small to compete with the majors in term of fixed cost absorption. In other words, its differentiation through innovation (both technology and features) cost more than what it can pay though a larger production, As a result, unit cost constantly increase, and, as prices fall due to the increased competition, its profit
• “c” is much less appealing than “b” for the same purpose

How should she handle the executive meeting?
She should first get out of the inter-department guerilla mode. Le Petit Chef team has first to rebuild its cohesion to face the upcoming challenges. Then, she needs to expose very thoroughly her findings as developed above. She needs to build her presentation in integrating marketing and operations inputs. Basically, she needs to presents the different options and how they would alter the course of the organization.

Developing fuzzy logic could be an opportunity to take advantage of a new phase of disruptive technology to sustain a competitive advantage. As a matter of fact, fuzzy logic has been incorporated by OEMs in many appliances, starting with dryers.

On the other end of the scope, the company could re-engineer there processes to re-orient its production toward low-cost product.
Whatever path is chosen, the marketing channel will have to be aligned. It doesn’t make sense to distribute high end products through Darty, (“Les prix Darty” doesn’t fit well with high profits for the