I. Problem Statement
Toucon Collections main problem is that their competition. Bargaining position has been eroded while their gross margin has slipped due to aggressive competitive bidding by others. Toucon has been offered a contract that presents them with an opportunity to broaden the firm’s position by increasing $4 million in additional sales over and above their annual growth.
II. Industry Analysis
Small Retail Mass-Merchandise
11 competitors in saturated market.
Must triple replica production to satisfy contract.
Authentic
Replicas
Toucon’s main product types are authentic and replica. Toucon mainly competes in the authentic product category although they are looking to expand their replica business to enter into the mass-merchandise department store chain market. Toucon sends out their buyers to deal directly with the Hopi, Navajo, and African suppliers. Toucon distributes its products exclusively through specialty dealers, firm-sponsored showing, and a few exclusive department stores. Products can be very unstable because of the nature of the supplier. Toucon’s perennial supply problem has become even more critical in recent years because of new competition and strict governments. Toucon’s main strength is that consumer trusts their products. In an industry faced with amateurs and fly-by-night competitors, consumers have difficult times finding quality, authentic products. Toucon has gained consumers trusts by their quality, authentic products in high-end specialty stores and exclusive department stores.
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