Type: Evaluation Essays
Sample donated: Freda Steele
Last updated: April 17, 2019
There was a new beginning of Viking Sewing Machines AB in 1990s. The owner of the Viking Sewing Machines did sell Viking to the investment fund Kapital. It also had new CEO Mr. Svante Runnquist form Volvo. He had been with Volvo over 25 years. Mr. Runnquist had worked in a number of different positions, mainly in market.
When the new CEO Svante Runnquist came to Viking Sewing Machines, much of his job was directed towards improving the market orientation of the Viking. The new mission statement and company strategy has enormous alteration to the internal competences and has the great influence to their business in their market strategy in the sewing industry. The case of Viking Sewing Machine is one of considerable contextual and organizational change. As a result, our group would divided into different aspects to do further analysis.
Internal AnalysisIn this stage, internal environment will be generally analysed with Five Forces analysis to identify which threats will mostly impact on this business. Then, main factors will be identified to able to lessen the threats to be success. The level of competitive rivalry is increasing as the demand for sewing machines seem declined and the more international brands get into market despite of slow growth of market.
High investment in fixed assets will be another reason because this is obviously one of exit threats. Companies have to differentiate their products and services to attract and create new customers in saturated market.Buyer power is increasing. The reason is at first that competition becomes intensive due to more international brands in market.
Another reason is the cost of switching a supplier is low as there seems no high differentiation between suppliers.Supplier power is low. Even though the switching costs are high because of the specialised product type, the suppliers have no powerful brand themselves and are not concentrated. Even some companies bring outsourcing, the product designs and other technological skills seem developed by companies.There have been increased threats of substitute in the sewing machine industry.
Since massive kind of products such as clothes, curtains, bags and so on manufactured from factories, which would have to be made in home, satisfy the customers in terms of price, design and quality, fewer people keep making hand-made products with traditional sewing machine.However, in industrial sewing machine sector, the substitute threat is still low as the substitutes could be innovative technology such as new texture that not needs to be sewed.Threat of entrants is still high even though E-business is encouraging entry easier. As internationalised brands share the market, economies of scale would be core barrier.
Indeed, obtaining know how in specific knowledge and to gain supply and outbound distribution will be another barriers to entry.Key Success FactorsAs analysed so far, sewing machine industry will be mostly threatened by increasing competition and buyer power. The reason can be seen as no big differentiation between products and services, matured market and change of technology.Customers in any market segment would have threshold requirements on all features of product and service. If there is one or more of these could not meet, the provider will drop out of the particular market. There also have keyl success factors in “Sewing machines” market. In terms of this product and market is at the “Mature” stage, their customers include the traditional user and new coming user.
These critical factors should concern all of them.At first, brand awareness with good quality of products will be core power to keep brand royalty with the traditional user and new coming user. Secondly, innovative differentiation of products as well as services will be another critical factor as competitive advantage. It is to satisfy and create the requirement for customer, indeed, help to keep relationship with customers. Next, wide range of product and service would be good way to satisfy different customer. Lastly, distribution channel will be vital power. As dealers have positioned importantly in this industry, good relationship with dealer is main power against new entrants.( Brand awarenessBrand is quite impartment factor for customer when they procure their product or service.
There are many reasons to branding for company. Make customer is de-randomizes product selection, assists consumer quality evaluation, symbolizes quality levels, reduces buyer risk, psychological reward of ownership, facilitates new products, helps create brand loyalty, product differentiation, permits brand extension strategy, facilitates personal selling and facilitates market segmentation. This is the same way in sewing machine market. Well-known brand name has high brand equity.
Husqvarna Viking , founded as an engineering and manufacturing factory in 1689, it has been making sewing machines since 1872. This is a critical resource for Husqvarna Viking sewing.( Distribution channelEfficient and steady relationship in dealers and customers is the key success factor in sewing industry. “Dealer Partnerships”, they believe the dealer were very important to Viking Sewing Machines in their new future profitability. This concept includes extended support for business development to encourage carrying the Viking product line exclusively. This also is crucial link to customer, customer would do any change.( Wide range of product and serviceWide and variety product and service range to satisfy different customer which is the crucial factor in the competitive industry. Husqvarna Viking, original market focus on “low priced” mechanical machine and they have completed R&D in sewing machines.
Furthermore, they acquired the division of Paffaff which had a specialized field in professional market. Nowadays, Viking as a worldwide organization marketing has complete line of sewing machines and sergers for home and profession use. In the other hand, to be a consumer-driven company, Viking would like to feed back and provide superior satisfaction to the customer and their Dealer-Partner by collecting information. To enhance the joy of creative sewing, Viking developed new extensive and easy use of software to control machine, convenient operation update system and variety of embroidery download form internet.
..etc. All they did which is to enhance their service and the joy of creative sewing.
( Innovative differentiation of products as well as servicesTo satisfy and create the requirement for customer, it is necessary to have the independent technology support in the sewing industry. It is also a significant completive advantage. Viking would like to provide superior satisfaction to the customer and their Dealer-Partner by collecting information from customer and Dear-Partner sides.
And then, to make the marketing and the technical department cooperated to development to design the new machine for customer needs. They also marked the running in the internet power and new technological application in the industry. These new technology could easy and make customers convenient to do their creative uses of sewing.
Resources and Competences analysisMission statement and strategic capability are underpinned by resources available to the organization. A set of threshold resources are needed to be provided to any market segment. They need to continuously to improve and develop this base to stay in business. Other else, unique resources are those resources to give the critically underpin competitive advantage to support their corn competences.
Mission StatementAfter of the new beginning of the new CEO change, CEO Svante Runnquist who has strong marketing background, he found this company need to improve their market orientation. As a result, the middle management and sales area managers had a series of seminars based on customer orientation concept. The mission statement is worked upwards through internal analysis involving the entire the company.