Women'S Undergarment Factory # 8

"Women's undergarment factory # 8"

Objectives

Corporate objectives

a) Increase income and profitability

Marketing objectives

a) Gain competitive advantage over competitors

Problem Statement

a) WUF#8 has to choose future target market

b) WUF#8 has to establish marketing and sales, R&D departments, and develop strong strategies in this area.

c) Space utilization, and equipment purchase

External analysis

Market size

a) Whole former Soviet Union was the primary market for WUM#8

b) WUF#8 produced about 4 million "Agata" brand finished undergarments per year for direct sales in Western Russia, Estonia, Latvia, and Lithuania

c) Huge market potential in Eastern and Western Europe finished goods markets

Market growth

a) Market is very large and unfilled

b) There is excess demand

Competitors

a) There is very high competition, and for WUF#8 closing for renovation might mean losing

its customers

b) Asian companies are competing both for bulk materials, and finished goods.

c) Some fabrics close due to inefficiency and tough competition

d) By positioning "Agata" brand as higher quality with slightly higher prices WUF#8 minimizes direct competition.

Relevant trends

a) WUF#8 is competing in finished goods markets with companies WUF#8 is supplying bulk materials to.

Internal analysis

Target markets and positioning

There are many markets WUF#8 is targeting and they are:

a) Bulk materials market in former Soviet Union.

b) Eastern finished goods market

c) Western finished goods market

d) Private label products for Eastern market

Product

a) Company closed silk fabric due to decreased demand, but actually made no analysis, why demand declined, was it due change in material preference, or supplier preference, so maybe WUF#8 could even keep silk fabric in case some changes would be implemented

b) WUF#8 has quite attractive product mix; it offers low and high quality products.

c) WUF#8 is positioning "Agata" brand as higher quality with slightly higher prices.

d) WUF#8 can choose better quality bulk materials for itself, and sell lower quality to its customers, and competitors.

Place

a) WUF#8 has very big plant territory, and closing operations in the middle of the plant caused inability to utilize free space

b) WUF#8 is located near the Baltic sea, so it has roads to many markets

Promotion

a) Actually WUF#8 has no promotion

Pricing

a) There is price variety and it depends on quality, and competition

Company factors

a) WUF#8 was one of the largest undergarment facilities in the world

b) General manager is "Soviet-type" person, who enjoys staying away from every-day WUF#8 issue

c) Most low-skilled employees tended to think and act as if they were still in Soviet times. It is hard to get them focus on quality, or productivity.

d) Current company structure does not match modern economics trends, does not fully reflects company operations, and should be modernized

e) Company should close personnel part of WUF#8, and establish HR, R&D, and Sales departments

f) WUF#8 should reallocate Western and Eastern markets managers

Market factors

d) Company has its own brand name "Agata"

e) WUF#8 is positioned as good quality supplier both in bulk materials and finished goods

External and internal analysis

Strengths

a) WUF#8 has a monopolistic in some areas.

b) Year 1999 financial results look very good.

c) Production is near capacity

d) Demand for product is very strong

e) Most sewing factories remained loyal customers of bulk materials

f) The plant had successfully managed the transition from a controlled economy to free markets

g) Built strong informal network between plant in former Soviet union is perfect formal network in free markets

h) Receiving information back from Western customers, WUF#8 could easily determine market requirements without doing its own research.