rapport blue ocean Cedii - Group: Greece Preferences of...

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Preferences of customers Group: Greece 29 may 2010 LSM2103 : Advanced Strategic Management Eric Cornuel RAPPORT OF BLUE OCEAN STRATEGY Chertovitch Helene Hermann Michel Roels Olivier 1
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Willemse Thomas Hostyn Cedric There are two geographical markets: Roundland and Starland. Our market includes the video consoles and video games themselves. First of all in the Round Red we had to choose between sophistication (differentiation) strategy and volume (low price) strategy. By analyzing the market we could distinguish 3 main competitors: Yellow which had volume strategy, Shiny with sophistication strategy and Purple which was the 2 nd after Shiny on the sophisticated market. In order to choose one of the two strategies we decided to analyze seven competing factors of each competitor and we concluded that we didn’t have enough capital to compete with Shiny. So we decided to base our strategy on volume and to compete with Yellow. Some of our characteristics were already better than those of Yellow, for example console sophistication, controller sophistication, audio and multimedia formats. As we haven’t got economy of scales yet we couldn’t offer a price lower than Yellow and in the same time we didn’t want to lose credibility by reducing very quickly our price. So for the first step (year 2008) we decided to reduce our price from 399 to 310 being 10 euro more expensive than Yellow in 2007. And in the same time we decided to improve our consoles in order to propose a little bit more sophisticated products than Yellow at nearly the same price. For all these reasons we decided to invest in two projects in order to reduce our price and to be innovative: Relocation to low cost country and Acquisition R&D. For 2008 our main target groups were people from 6-35 years old because they were price sensitive. Even if by analyzing customer preferences of 2007 and 2006 we could notice 2
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that more and more persons after 36 years old preferred Yellow with its low price we decided to focus on the two first segments because we were not sure that the last segment would be interested in our product, being not a price sensitive segment (according to introduction information in Blue Ocean). Furthermore this segment was much smaller than 6-21 or 22-35. So our segmentation strategy was 50%-50% corresponding to the segments 6-21 years old and 22-35 years old. Distribution channels were chosen according to customers preferences. So we decided to cover 70% of Low-price oriented channels and 70% of video games chains. We thought that in the case when the 3 rd segment (+36) would be interested in our low price products they would change their usual distribution channel (specialized electronics stores) because of the changing of their preferences for low price products instead of hyper sophisticated ones. In order to promote our products we invested as much as possible in marketing linked with geographical expansion. The production plan was calculated in the following way: we determined the desired market share for the next year for the specific
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This note was uploaded on 11/13/2010 for the course LSM 2000 taught by Professor Swaen during the Spring '10 term at Université Catholique de Louvain.

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rapport blue ocean Cedii - Group: Greece Preferences of...

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