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EMB 606Paper 2 – Strategy RecommendationPorter’s Generic Strategy Recommendation: Remington CompanyTeam 7: John Davidson, James Johnson, Rhonda McGinnis, John Stubs, Jeremy WeathersbyUniversity of North AlabamaMarch 9, 2016
In February, 2014, Remington Outdoor Company announced plans to open a new plant in Huntsville, Alabama, where they would be producing a new handgun marketed to women, the model RM380. As a continuation of Porter’s Five Forces our team 7 has been tasked with making a strategy recommendation to create a sustainable long term competitive advantage, based on Porters Generic Strategies, to help Remington position this product for success.With the RM380, Remington is entering a narrow, niche market where focus strategies work best. Remington does not have the economies of scale in this weapon class to support a cost focus strategy; their largest market share is in rifles and shotguns (17% and 21.5%, respectively) (2014). Annual Report 2014. In addition, the cost of re-engineering the Rohrbaugh R9, after purchasing gun manufacturer Rohrbaugh in 2014, narrows the cost margin too much for a strict cost focus. Further analysis of Porter’s Five Forces leads our team to suggest a differentiation focus strategy to Remington. The strategy we are recommending is one based on “quality for the price”. This strategy is supported by the analysis that shows the compact concealed handgun market has strong forces in the areas of Buyer Power, Threats of New Entrants, and Competitive Rivalry thatwould allow Remington to take advantage of a long history producing quality firearms for relatively low price points.Remington’s RM380 is a re-design of the Rohrbaugh R9, a product already considered to be a top quality firearm being named Shooting Illustrated 2005 “Handgun of the Year.” The RM 380: Remington's Big Gamble - Bearing Arms - pocket carry, Remington, RM380. (2015). Remingtonredesigned the weapon adding proven ideas to improve the weapon’s performance and make it more attractive to the lightweight compact handgun target market. These changes included a double action only design with a lighter trigger pull to accommodate the handling and firing of the weapon by women. They also made a change to the recoil system to make the weapon more comfortable to fire in general, especially for people with less hand strength. These designs are allpart of the overall strategy to market the weapon to women first and secondary markets such as the pocket carry conceal market for men or secondary weapons for police enforcement officers.