1. What is the critical problem or challenge facing the firm that you will try to resolve:
The problem is how to sell the company’s products online (e-commerce) (James L. Heskett, 2018). As a result of increased advancements in technology and recent improvements in logistics, companies are selling their products online, a field that is proliferating.
To address this issue, the company should focus on introducing its products online, which can significantly lead to increased sales, as many of MC’s target customers are from the younger generation and are heavy online shoppers (James L. Heskett, 2018).
Expansion problem
This is another major problem that the MC Company is facing: whether to expand its operations and open more stores across the globe.
The company should focus first on the growing sales and demand for its products in Brazil and other large markets.
The Fashion Challenge
The other challenge facing the company is whether to pursue fashion design or build on the company’s iconic long-running styles. This is a result of reduced demand due to changing tastes and preferences for the company’s once-hot brands in the market.
The company should create four fashion cycles and increase advertising and promotions.
The problem of the Ageing Population
This is another major problem that the company is experiencing, as the company only targets people between the ages of 18 and 35. In reality, not all sales come from this population, although the highest percentage of sales comes from this group.
The MC Company should embrace even older consumers, as they may be loyal to the brand and spend more money, which will lead to increased profits.
2. Your external analysis (the industry and economic environment, PESTEL/5 Forces:
Political factors
Policies for growth that are essential for the MC Company, such as international agreements on tax and low interest rates.
Changes in manufacturing and tax laws and regulations in different countries, as the company sells and designs shoe fashions.
Political conflicts can complicate customs-related operations and may prevent exports and imports.
Economic factors
A collapse in economic conditions would mean that the company experiences reduced sales or that consumers switch to other lower-priced and cheaper fashions if economic conditions are not favourable.
The company’s success depends on the availability of labour at an affordable price that allows the company to enjoy significant profits, and any changes in economic conditions forcing the cost of labour to rise may lead to reduced earnings for the company.
The MC Company has an opportunity to sell products in other emerging markets around the world with its strong financial resources.
Social factors
Age and gender distribution in the country and other possible target markets are leading factors that may affect the performance of the company, especially the distribution of females aged between 18 and 35 years.
The norms and changing consumer tastes and preferences of the Brazilian people, especially where the company started and where its primary target market is located, may have a significant effect on the operation of the company.
Technological factors
The emergence of new technologies, such as online shopping, has a significant effect on the marketing and advertising of the company’s operations and products and has helped the company reach many consumers.
Marketing is also affected by the technology used by the company, the general methods of sales management, and the company’s data management.
Legal factors
Legislative issues related to the company opening new stores in different countries are factors that may lead to the success or failure of business growth.
Consumer protection laws.
Licensing regulations vary in different countries, and this may affect the company’s activities.
Sustainability affects the company’s operations and the extent of its activities.
The management of waste products also affects the company’s profits and operations.
3. Your internal analysis (the firm’s internal resources and capabilities, VRIO):
Value—the firm can easily access resources that are not very expensive.
Rareness—the materials used to design and make new shoes and products are not rare and are readily available.
Imitability—the products and resources are easy to imitate, which can cause increased competition.
Organization—the firm is organized in such a way that it can handle and exploit the available resources. It is managed by experienced managers and designers who quickly change the design of products to fit market demand.
4. The mutually exclusive alternatives that can be used to solve the problem:
Selling the company’s products online or through retail partners.
Pros and Cons of Each
Selling through E-commerce
Pros
The company will reach many customers and hence increase sales, and this will lead to high profits.
Reduced logistics operations and activities.
Fewer employees needed for selling the company’s products.
Cons
Retail partners will suffer as a result of lost sales.
The possibility of attacks by malicious actors.
It may reach even those who are not targeted.
Denial-of-service attacks may lead to reduced sales and other losses.
Selling through Retail Partners
Pros
Will reach only the target customers.
The retail partners will retain their sales.
The brand of the company will remain valuable.
Cons
The company may not achieve a significant market share.
The company will lose sales from online shoppers.
The company may suffer future losses if competitors advance in e-commerce and achieve better sales.
5. The justification for the alternative I have chosen:
The company should embrace sales through e-commerce because it will reach a large population in the region, minimize logistics operations, and save on salaries used to pay sales personnel, as fewer of them will be needed.
References
James L. Heskett, J. T. (2018). MONTES CALCADOS: A Step Ahead.
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