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Analysis of Sonite's Past Performance, Strategies, and Adjustments: Key Lessons and Recommendations

This analysis examines Sonite's past performance, main strategies pursued, key adjustments made, and the lessons learned. It also provides recommendations for future actions, including monitoring the industry, investing in marketing research, and entering the Vodite market strategically.

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Analysis of Sonite's Past Performance, Strategies, and Adjustments: Key Lessons and Recommendations

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  1. Cosmo GroupI Meagan Carrow Xiaodan Dong

  2. Outline • Analysis of past performance • Main strategies pursued • Main Adjustments • Key Lessons • Recommendations for the Future

  3. Analysis of Performance • Stock price $2,318 • Retail sales $1,214,398K • Cumulative ROI 2.92 • Four segments in Sonite • Professional - SIBI • High Earner - SIHO • Others - SIRO/SIRR • Single - SINU • One segment in Vodite • Innovator/Early Adopter -VINO

  4. Main Strategies Pursued • Target One Segment per Product • Focus First on High-Margin Groups… • Professionals/High earners margin $250-$280 • Singles/Others margin $90-$120 • Then Address High-Growth Groups • Singles & Others • Keep introducing new products • Company growth • Stock price

  5. Adjustments in Sonite Market • Introduced SIHO for “high earners” in period 3 • Competitors more interested in “professional” • High R&D investment, high margin, high return • Introduced SIRR for “others” in period 4 • Inappropriate pricing strategy trashed SIRO • Disposed SIRO in period 4 • Used a new name to replace SIRO

  6. Sonite Adjustments Continued • Balanced advertising and sales force in period 4 • Learned from competitors • Sales force was shorthanded • Modified SIBI for “professionals” in period 8 • The oldest product • Still very profitable • Transferred some resources to Vodite Market in period 8 • To have a strong opening

  7. Adjustments in Vodite Market • Monitored competitors’ R & D expense • Predicted Team A would promote Vodite product in period 7 • Bought marketing research studies in Vodite market • Introduced VINO in period 8 • Sonite market growth slowed down • Started PVINO since period 5 • Not to be the first mover • Competitive pricing strategy • Started PVIDO for adopter in period 8 • Higher growth

  8. Key Lessons • Don’t completely neglect anything… • But don’t overspend either • Watch your competitors… • But remember you can never predict exactly what they will do

  9. Key Lessons (cont.) • Use the marketing studies • Turn the data into information • Balance your investment into new products and the maintenance of existing (successful) products

  10. Recommendations • Continue to monitor the industry • Invest in marketing research • Don’t waste the investment by ignoring the data • Enter the Vodite market slowly • Let another company make the risky entrance, then use the data provided from their entrance

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