Pearl River Piano Case
Strategic Marketing Management
Written Case Analysis:
Pearl River Piano
[pic]
I. Background 3
II. SWOT Analysis 4
III. Issue Analysis 7
V. Alternatives: 11
VI. Decision Criteria 13
VII. Application of Decision Criteria on Alternatives 15
VIII. Recommendations – Global Diversification by Higher-Value Brand 18
IX. Conclusion 26
X. Appendices 27
I. Background
The Pearl River Piano group (PRP) had started as a Chinese state-owned firm in the mid-1950s. Due to low production cost and good access to raw materials, it enjoyed a price advantage and has successfully ventured abroad in the early 1990s. To further penetrate into the foreign markets, PRP has invited various expertises, upgraded its production methods and acquired foreign brands to improve the overall quality of its product to meet the international standard. By 2004, PRP captured 11% of US market share and exported products to over 14 European countries. However, many still thought PRP as low in quality and did not perceive PRP as “global brand”. Furthermore, PRP’s low cost advantage in the industry was threatened by the rising material cost in China and foreign players who offered higher quality products at comparable prices.
In this case study, we assumed ourselves as the management team of PRP in around 2005. The objective of this case study is to identify opportunity or problem faced by PRP from the factual information at the moment of time, develop alternatives, and recommendations for implementing the suggested alternatives.
II. SWOT Analysis
SWOT analysis (strengths, weaknesses, opportunities and threats) was used to define all the issues that PRP had to consider in making decision in terms of the present state of PRP and identifiable trends.
Strengths
After analyzing the internal environment of PRP, the following strengths which gave PRP advantages over its competitors were identified.
i. Lower Production Cost – PRP had a price advantage when it was
Written Case Analysis:
Pearl River Piano
[pic]
I. Background 3
II. SWOT Analysis 4
III. Issue Analysis 7
V. Alternatives: 11
VI. Decision Criteria 13
VII. Application of Decision Criteria on Alternatives 15
VIII. Recommendations – Global Diversification by Higher-Value Brand 18
IX. Conclusion 26
X. Appendices 27
I. Background
The Pearl River Piano group (PRP) had started as a Chinese state-owned firm in the mid-1950s. Due to low production cost and good access to raw materials, it enjoyed a price advantage and has successfully ventured abroad in the early 1990s. To further penetrate into the foreign markets, PRP has invited various expertises, upgraded its production methods and acquired foreign brands to improve the overall quality of its product to meet the international standard. By 2004, PRP captured 11% of US market share and exported products to over 14 European countries. However, many still thought PRP as low in quality and did not perceive PRP as “global brand”. Furthermore, PRP’s low cost advantage in the industry was threatened by the rising material cost in China and foreign players who offered higher quality products at comparable prices.
In this case study, we assumed ourselves as the management team of PRP in around 2005. The objective of this case study is to identify opportunity or problem faced by PRP from the factual information at the moment of time, develop alternatives, and recommendations for implementing the suggested alternatives.
II. SWOT Analysis
SWOT analysis (strengths, weaknesses, opportunities and threats) was used to define all the issues that PRP had to consider in making decision in terms of the present state of PRP and identifiable trends.
Strengths
After analyzing the internal environment of PRP, the following strengths which gave PRP advantages over its competitors were identified.
i. Lower Production Cost – PRP had a price advantage when it was