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Hunley Inc Casting For Growth Case Solution
Hunley Incorporated is fly-fishing rod provider that operates in a competitive market. It is faced with a dilemma and needs to decide on how to move forward. It is presented with two strategic options to choose from, each of which comes with inherent risks. The first option is to introduce a new product line that is made from a different material of better quality. The other option is to develop an entry level rod and place it at Walmart stores. The analysis of the company and the recommended action plan are presented in this report.
Following questions are answered in this case study solution
Introduction and Problem Identification
Recommended Action Plan
Case Analysis for Hunley Inc Casting For Growth
i. Environmental Analysis
Porter Five Force Analysis
Porter five force model is applied to understand the key industry dynamics. Hunley Incorporation operates in a competitive business environment, where the bargaining power of suppliers is moderate. The suppliers have certain weaknesses, like they do not adequately invest on the marketing and advertising activities and they are high in number. The bargaining power of buyers is high due to high competition. The product is easily available to the buyers and there are a number of competitors, which strengthens their bargaining power. The industry analysis suggests that there is high competition. The competitive rivalry is intense due to low entry barriers. Firms can easily enter and leave the industry as there are no strict regulations, the initial expenditure is also not high and psychological switching costs are also low. The competitive analysis suggests that the industry is fragmented due to which any market player cannot exercise the power, neither any one rules the industry. The threat of substitute products is low as mostly, the substitute products do not offer the same value as offered by the main product. The overall Porter Five Force analysis indicates that business environment of the selected industry is productive and has healthy competition. The market is fragmented and there is need to increase investment on marketing activities to win more customers.
ii. SGA (strategic group analysis)
The strategic group analysis shows that the companies in the selected industry hold the similar structural characteristics with low differentiation between different strategic groups. Hunley Incorporation has set the differentiation basis through careful craftsmanship and by using advanced materials. There are some players that offer full lines of accessories and equipment. Some have specialized in flexible rods and some players concentrate on the niche market segments for better concentration. The analysis of marketing activities suggest that the existing market players do not invest on the marketing and promotional activities. The current market situation is requiring market players to revise their marketing and communication strategies for setting the differentiation basis and expanding the existing customer base. Overall, Hunley Incorporation falls into the strategic group that serves the customer market with
Industry life cycle
The fishing equipment industry is highly fragmented and competition is intense. The industry analysis reveals that market is ruled by various strong market players. However, the differentiation basis are weak and lack of adequate investment on the marketing and promotional activities provide the growth opportunities to the market players. The industry is currently on the growth stage, where, each player has various growth options and can expand their customer base by revising their marketing-mix.
iii. Resources and Competences Analysis
The value chain analysis indicates the activities or processes through which Hunley Incorporation creates and adds value, which may include marketing, production and after sales services provision. The analysis of value chain activities suggests that firm has well developed infrastructure and has sufficient resources to serve the chosen market segment. The review of inbound logistics indicate that firm has developed an advanced infrastructure that supports its IT and production processes. The outbound logistics review indicates a well-developed sales and distribution network. The company has developed partnership with large retailers of fishing equipment. The distribution and marketing activities are geographically distributed. The human resource analysis indicates the availability of required human capital to perform the required business operations. There are three regional managers responsible for performing the business and marketing operations. The management has developed close relationships with fly shops to promote the product. A well-developed website deals with direct sales and supports the overall marketing system.
The first resource that is possessed by Hunley is the design for its rods that are patented. These designs are affordable by customers and are made from advanced materials and careful craftsmanship. These designs and their patents are a valuable resource for Hunley as they generate sales for the company. These are rare as competitors cannot acquire them easily. These are also difficult to imitate because patents have been filed for them. These rods, however, aren’t organized to bring value to the company mainly because of their pricing in the market. These rods aren’t priced as high as competitors’ high-quality rods, which has resulted in the market perceiving them as medium or upper-medium in quality.
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