The paper "Acme Corporation Faces Disruption " is an outstanding example of a business case study. Acme Corporation is an Australian company that is engaged in the supply of building and construction materials such as plasterboards, adhesive flooring, and roofing tiles. The company has been operating in the Australian market since 1958. The company operates as a Business to Business (B2B) company which means that it does interact with the end-users of the product despite its popularity as an effective brand in Australia. The competitive advantage that Acme Corporation has in the Australian market include the high quality of its customer service, quality products and made in Australia sourcing arrangements.
The company also has a dedicated workforce and a highly experienced CEO in the industry. The company’ s competitors include Shesright Pty Ltd, Hammer & Tong and Arrow Inc a new entrant into the market that threatens to introduce low-cost products into the Australian market. The main objective of this case study report is to assess the threat that Arrow Inc poses to Acme Corporation and its competitors. The paper will also evaluate the proposed responses by the CEO’ s of the companies and provide a probable recommendation to Acme Corporation. Summary of the case study Acme Corporation is an Australian company in the building materials industry whose popularity in the market is attributable to among other factors better customer services, highly qualified staff, and management and the production of quality products.
The company sells to another retailer in the market and this explains why it is a B2B company. The company’ s CEO is highly qualified in the management of the industry, especially in the supply chain issues.
Acme Corporation has two major competitors which are Shesright Pty Ltd, which is a Tasmanian based company that produces products that are similar to those of Acme. Shes right Pty is more focussed on trade sales and it operates through a specialist distribution channel. The company controls about 46% of its niche market and has a reputation for excellent service provision. Hammer & Tong (H& T), a subsidiary of French Company operates in a market supplying DIY customers with premium-priced products from France. The competitive advantage for this company is that it provides high-quality products that are easy to use and can be purchased online or from H& T shopfronts in major cities within Australia.
Arrow Inc a new entrant into the Australian market. This company is a member of the Warrior Group, an Asian based company that intends to brand and sell building materials sourced from Asia directly to the end-user. This is an indication that the company will be engaged in both trade and the sale of products to DIY customers. The threat that Arrow Inc poses to the rest of the competitors in the Australian market is that it intends to sell its products at a 30% discount in relation to the current market price.
The company will also be a threat to other retailers that source their products from Acme Corporation such as Bunnings. Arrow Inc threatens to disrupt the status quo in the industry. This is through the perceived ability of a new entrant to deliver greater value through a combination of new approaches such as low cost, high-quality products and the provision for a value proposition that is appealing to the market compared to those by those of the incumbent.
Arrow also threatens Acme through providing a discount to end users hence retailers such as Bunnings will require Acme to reduce their prices to meet the standards of Arrow. It is also possible for Arrow to threaten the retail business by developing better propositions to customers such as Bunnings. Other competitors in the Australian market such as Shesright and H& T have developed initiatives on how to respond to the impending Arrow market entry. She's right, for instance, has chosen to use propaganda against Arrow arguing that the low cost of products is comparable to the low quality of the company’ s products.
This explains why the company’ s CEO does not consider Arrow Inc as a threat to the industry. H& T through the company’ s CEO has decided to shift focus to create a new line of affordable products targeting customers that are price sensitive. Acme seeks to respond to the threat posed by Arrow through an introduction of cost-cutting initiatives. The process of implementing this initiative there needs to minimize the possibility of alienating its unionized workforce hence preventing the possibility of workers strike.
It is also important that the cost-cutting initiatives do not impede the possibility of undertaking necessary investments in technology and infrastructure as these as essential in the growth of the business.
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