Post on 14-Oct-2014
transcript
Computervision Japan
Group 5 Rohit Nath
Gaurav Patange Mangesh Patil Mahtaab Kajla Sachin Kumar
Situation Analysis
CV had given exclusive distribution rights to TEL to market its CAD/CAM products in Japan
CV used direct sales alternative in US and European
TEL had excellent relationships with CV’s customers in Japan and therefore was valuable ally to CV
TEL’s performance in handling CV’s product line was declining mainly because of lack of enough dedicated manpower
•Exclusive distribution contract with TEL not renewed
•Resources allocation preference to TEL’s other JVs
Current channel performance was declining drastically and needed rethink of distribution strategy to achieve the target of 30% market share in 3 years
Problem Statement
Strategy to migrate from declining to growing distribution channel keeping in mind the organization capabilities and existing collaborations thereby achieving the target of 30% market share in Japan in 3 years
Evaluation of Alternatives
Build own Direct Sales Network
Pros
Very effective as proved by competition and in other markets
Cons
High administrative expenses
Difficult for US companies to hire Japanese nationals
High implementation time
CV will break its long-established relationship with TEL
Joint venture with TEL
Pros
Strengthening of relationship between CV and TEL
Expansion of salesforce by TEL
Local knowhow of market
Cons
Predominant Japanese partner will have major control
Senior Management of CV against the option – high internal conflict
Evaluation of Alternatives
Take over servicing and support activities from TEL
Pros
Better sales coverage by redeploying sales force of TEL
TEL can focus fully on sales
Cons
TEL not ready to transfer its own resources
Additional cost for CV
Service quality may degrade since servicing is not CV’s core competency
Multiple distribution arrangements with Toyota and Sony
Pros
Established credible channel
Distribution network of different companies can be used for maximum benefit
Good for acquiring new customers from large industry groups
Cons
Obstruct relationship with TEL
Additional product training costs for CV
Additional service and support costs for CV
Commission on sales to be shared
Complementary Penetrate •Keep existing channels •Add new channel •Reinforce current capabilities •Low internal resistance •Low channel conflict
Develop •Keep existing channels •Add new channel •Develop new capabilities •Medium internal resistance •Medium channel conflict
Replacement Switch • Exit existing channels • Add new channel • Reinforce current capabilities • Medium internal resistance • High channel conflict
Reinvent • Exit existing channels •Add new channel • Develop new capabilities •High internal resistance •High channel conflict
Enhancing existing Capabilities
Requires new capabilities
Internal Impact
Selection Criteria
Recommendations
Take over service, support and product adaptation activities allowing TEL to focus on sales efforts
• Additional costs compensated by capturing additional market share
• Relationship with TEL is strengthened by renewing distribution rights to TEL as most preferred distributor
Multiple distribution arrangements with Toyota and Sony
• Medium channel conflicts with TEL will be evident but will have to be compensated by strengthening relationship by above recommendation
Modify organization structure to suit above recommendations
Thank You