Case Study: Freezing Out Profits

In: Business and Management

Submitted By weixuanlaw
Words 608
Pages 3
1. Issue – Loss of major customer

Based on the issue above, we suggested that Cold Cuts Ltd (CC) to reposition their long-term business strategies. Cold Cuts Ltd (CC) is a manufacturer specializing in refrigeration components, which focus on the Singapore local market, factory in China and exported worldwide. CC enjoyed the low cost in the China market which brings desired profit, they should consider to expand their business to a wider market that enable to have a greater customer base. Hence, business expansion strategies should consider about the countries with higher demand and cost concern. For example, India, which has the second larger population in the world, is the suitable market for the expansion. CC can enjoy the low labor cost with a mass production, reduce the production cost based on the economies of scale. Overall production cost reduction would leads to a profitable return and CC can actively compete in the market.

Manufacturing of component in Singapore is much more expensive compared to China and India. We suggest CC to take the advantage of lower cost in China and India production. They could produce the components and send back to Singapore. By doing this, they can sell at a lower price which can attain the existing customers, as well as attract more potential customers. To avoid and eliminate the revenue dependency on the major customers, the lower price strategy could enlarge their market by having a larger amount of customers. Thus, CC can prevent the loss of major customer crisis with Secconz. In addition, to meet the different level of customer requirements, CC should consider to produce different grades of components. This would incur certain cost in initial stage, such as market research and development (R&D) cost. However, for long-term strategy, CC would satisfy different level of customers by providing different grades of…...

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