Teragren Company Market Analysis - Case Study Example

TERAGREN COMPANY MARKET ANALYSIS (Student Name) (Course No.) (Lecturer) (University) (Date) Company Descriptions Teragren Company, which is located in Washington at the heart of Bainbridge island, is one of the developers and designers of bamboo building products. The company which was cofounded by David M. Knight in 1994 is committed to furnishing of businesses and homes using bamboo products. The company is mainly specialised in bamboo panels, bamboo flooring, workshops and bamboo varnish (Beall, 2010, 14). Despite the specified areas of specialisation, the company is still exploring the market to identify other opportunities where bamboo can be utilised. Just like other companies in the globally competitive market. Teragren company is also in a mission of expanding the supply of quality bamboo products fo the construction industry to ensure their success in the business. The company definition of success is to provide quality products and exemplary customer care. The backbone of the success is also driven by the company desire to promote social responsibility and environmental sustainability while undertaking product production and business operations. Since the establishment of Teragren, the company has maintained a constant supply of bamboo products to replace timber products that have for a long time related to forest habitat destruction (Knox, 2008, 201). The company saw that the construction materials were becoming more scarce. With the ever increasing population, Teragren Company saw the need to come up with a renewable resource that would be viable for the construction industry. The idea gave birth to the establishment of the company to adopt the use of bamboo for construction as a strategy that endorse environmental sustainability specifications (Ibid, 281). The company is also after the promotion of green construction of houses that involve the use of products that back negative environmental impacts. Contemporarily, Teragren is recognised as the leading developer of bamboo sticks that are environmentally friendly and are environmentally sustainable. Product Descriptions For many generations, bamboo has bee widely used in the building industry but it had never been commercialised. Teragren company has used the realised opportunity to commercialise the use of bamboo that see the material produced in three different products. The product is mainly for flooring, accessories and workshops (Knox, 2008, 49). The bamboo is a purely natural product that exhibit natural colour variation that is used to create versatile and unique floors. The bamboo, products for flooring are produced in accordance to size and colors. The Xcora solid flooring includes portfolio color wide banks, energy solid strip, portfolio natural side planks, energy one solid strip and vision-wide pranks. All the products are starand taboo for flooring for both commercial and residential settings (Bonda & Sosnowchik, 2007, 251). The second category is the pure form solid flooring products that are prefinished bamboo. The products provide a living room, dining and foyers elegance, a style transferred from he traditional setting to the current construction industry. These class of products include signature natural solid strip, element solid strip and craftsmen long plank (Koekemoer & Bird, 2004, 43). The third category is considered as engineering flooring products that constitute synergy wide plank. Vintage wide plank and studio-wide planks. The products are to provide an enhanced performance, beauty and durability of the living and dining rooms. The class of products can be styled in various shapes to enhance the desired beauty. Teragren products are all made from mature bamboos to ensure that the products are of high quality, durability and of high performance. The source of the products is 5.5 Moso Bamboo that is harvested in a more sustainable way. This particular specie of bamboo matures fast in five to six years to produce products of maximum stability and hardness. The products have been compared to the hardwood Oak and maple and the result have proved that the bamboo is still the best in term of quality and durability. Industry, Competition and Company Analyses Teragren company is established with an aim of ensuring that the construction material manufacturing company become proactive that being reactive in the construction material business. The industry engaged in an activity of tracing the development of the wood flooring sector. The result revealed that the competition activity is mainly revolving around consumer preferences, environmental factors, supply chain, price and offshore competition. Therefore, Teragren company coma up with a strategic plan to select the trends and opportunities that could fit best in the manufacturing, consumer preference and market mix (Bonda & Sosnowchik, 2007, 271). The wood flooring business is gaining popularity in the contemporary building industry. The largest producer of wood flooring material is Canada, China, Brasil, Russia nd Indonesia. In Canada, the production in the year 2007 was estimated to be four hundred million square feet, and over 90% of the production is exported to the United States of America. Therefore, Teragreen is established to bring competition and to meet the rising demand for the product. The company has since faced competition in North America due to the importation of similar products from Canada, and mainly from China. From the commercial statistics, the demand for the wood flooring has risen from the year 2000 to 2007, and the number continue to rise. In the year 2000, the import from China was worth one hundred million dollars, while, in the year 2007, the import cost was over one billion dollars. This means that a large proportion of the materials are imported from China in order to manage the product demand (Biró & Biró, 2005, 355). The competition in North America is brought about by industries that produce the same wood flooring products. Teragren survives in market share of between 15% to 25% together with other companies. Considering the statistical information collected from all the companies in the region, the sale for the product was estimated to be 5.2 billion dollars in the year 2007. The region sells about 60% of the wood flooring products that is also produced locally. The competition arises from four major companies which include Shaw, Mannington, Armstrong and Mohawk (Brown, 2000, 235). The companies ensure full-time production and supply of the materials to various customers in need. The market condition put Telagren company in a more competition in terms of production and distribution of the product. Market Segmentation, Targeting And Positioning Market segmentation is the description of strategic marketing techniques that involve the division of the entire market into subsets of consumers, states, enterprises with common perception or need, and using the characteristics to target the market. The approach is the one that has been applied by Teragren as a business strategic plans for success. The company strategy is to offer quality and durable products that outcompete those that are currently being offered in the market. The company management team want the customers to have value for the money spent in buying the products. The type of service delivery and quality od the products is important in evaluating the company capital investment and the capturing the available opportunities (Koekemoer & Bird, 2004, 46). The operation strategy to be adopted by the business is to maintain constant communication with the customers and get their perception and feedback concerning the quality of the products. The success of the business is also based on the relationship that exist among the employees. The employees are required to meet the market segmentation and the strategic plans to reach the consumers. The functionality of the industry is based on the industry vision statement and the continuous effort by the company to make the products available as well as delivery of high-quality products. The establishment of the segmentation need is base on the increasing demand for the Wood flooring product in North America and other regions. The Teragren Company is established to ensure that the products being produced are more improved compared to the current products present in the market. Delivering an array of different products will meet the gap that target customers perception and requirements. The positioning is realised from the current market situation of the wood flooring products. Market research information show that the available companies are not in a position of developing alternative covering that are durable (Brown, 2000, 281). The companies only meet the target by delivering about 49% of the products. The data also show that the customers demands are only met by 33% hence leaving a wider gap that Teragren is in a position to close. Moreover, the production of new products and provision of installation services is recorded to be 32% and 22% respectively. Teragaren will be positioned to help solve the challenges in the market by producing quality products, as well as providing the much-needed customer services (Bonda & Sosnowchik, 2007. 382). The gap in the market is also targeted by the company to ensure the delivery of durable and introduction of new products that will make the company preferred by many customers and the building companies (Brebbia & Wilde, 2010, 123-294). Market Share and Sales Forecast Currently, the various companies in the North America capture only 60% of the market. The remaining 40% is covered by the dealers who import the products from other regions such as China. Considering the sales forecast, various factors contribute to affecting the demands and trade for the products in North America. Some of the factors are based on economic conditions, remodeling and demand for the bamboo flooring against other flooring materials (Bonda & Sosnowchik, 2014, 235). The company target is to capture the 40% remaining markets share through establishing several outlets in the region. These outlets are to provide customers with adequate information concerning the quality and durability of the Teragren products. The strategy will meet the market demand and increase the company sales and popularity in North America (Cdilda, 2007, 235). According to data recorded by Euroconstruct, various activities in the construction industry has created the increased demand for quality products. The graph below shows the market share for wood flooring in North America. From the figure, it is clear that the used of wood floor is wide, and the demand will increase over time. Therefore, telegram company is focusing on the increasing demand that will make the Teragren company more preferable. By producing quality and durable bamboo flooring materials, the company can increase its sales and maximise on the profits. The company sale forecast to maximise on revenue is by producing a variety of shapes and colour in accordance with customers demands. The technique will see the company meeting the market demands hence increasing the sales (Brebbia & Wilde, 2010, 256). Product Strategy Product strategy is the good that Teragren Company will be producing and offering to the market. The accomplishment of the company depend on the good that are being produced, and the company should put focus on the quality of goods and service delivery. The company should aim at producing bamboo flooring materials that meet the market demand (Knox, 2008, 235). The product strategy by the company also refers to the activities that the company engage in while developing the products, with a focused mind on the market availability. Therefore, the product must be satisfactory to the customers, unique compared to other products produced by the existing companies, and the price must be affordable but competitive. Teragren company product strategy to produce different products put in a best position to compete effectively in the market. The company produce a range of bamboo products which are categorised into portfolio TG Collection, Synergy wide plank, Synergy MPL and Synergy one. The products also come in various colors which are also categorised in three forms depending on quality. The fourth category is the Parquet Butcher Black, which are available in natural and caramelized colours (Bonda & Sosnowchik, 2014, 246). The second category is the pure form bamboo workshop that are also available in natural and caramelized brown color. The las category is the Xcora bamboo Workshop, which take the color of wheat and chestnut. All the products are ideal for flooring, cutting surfaces and ensure durability (Koekemoer & Bird, 2004, 173). Pricing Strategy This is the amount of money the customers have to part with to acquire the product. Pricing strategy for the product is an important variable that Teragren company have to determine. Pricing strategy is one way in which the company will evaluate the criteria of the consumers as well as monitoring the cost incurred while producing the products. Pricing is also one of the challenging market aspects that the company must critically manage (Cdilda, 2007, 41). To maintain the price integrity, the company is expected to implement strategic pricing that will enable the company to maximise on the profits and marketing tactics. Upon the production of the high quality and durable bamboo products, the company should put a fair price that will see the company attract consumers as well as strategizing to lead ahead of the other companies (Chiras, 2013, 235). Since the company is operating in a market that has both locally produced materials, as well as those being imported, the company has to conduct research to know and understand customers preference. The information that will be produced by the customers will be utilised in developing products and setting a good price that will attract more customers to buy the company products (Gofton & Ness, 1997, 237). The strategy is the reason why Teragren Company is manufacturing products of high quality, durable and those that are environmentally sustainable. Place/Supply Chain Strategy This is also the most important section for the company to know how the products will be accessed by the customers. The products must be availed to the customers at a convenient place that can easily be reached so that they can make purchases. From the consumer perception, the supply chain or the distribution channel is the point where the customer will have a direct interaction with the products suppliers. Therefore, it is important for the company to develop a good supply chain that will enable the company to interact closely with the consumers (Beall, 2010, 173). For this reason, Teragren company has established many outlets in North America in order to ensure the product is available to many customers. The company has a network of more than four thousand dealers that ensure the customers are in a position of finding the various products being produced.The company is also using other businesses such as special construction material stores, design center and business contract to help builders find the quality products (Chiras, 2013, 351). Finally, the company has created a website and contact that people can utilise in finding the closest outlets that they can find the products. Promotion/Advertising Strategy/Personal Selling Strategy This is the communications strategy, or plan that the company will deploy in ensuring the information about the company products are known, are available and the place where to find the products. The promotion activities are carried out to communicate with the marketplace as a way of promoting the sale of the company products. The information provided through advertisement is effective in assisting the customers to know information about the products and make the decision of purchasing the company products. Product promotion can be done through media advertising, personal selling, public relation and offering incentives for the product (Fanning, 2005, 235). Teragren company has deployed the use of brochures, social media, sale promotion and other advertising platforms to ensure potential customers are informed about the company products (Birn, 2004, 32). Through the promotion, the company is in a position of managing the organisation challenges that are related to customers perception, preference and quality that the company need to fulfill. In August 2012, Teragren company developed an interactive mobile website that the company would use to interact with the customers. The website which was easy and quick to access features company products that are available and giving a proper description of the quality and durability of the products (Bonda & Sosnowchik, 2014, 235). The website also enables the customers to post their questions concerning the products and get a response of the company management. Through the platform, the company has realised a positive response from the customers, with many preferring the products. The company strategy of using personal selling in over four thousand outlets is meant to create customer value for the products. The criteria enable the company to identify creative solutions to issues that may be challenging to the customers. In connection with that direct selling make the buying process easy. This is one of the techniques that enable the supplies to interact one on one with the customer and get an immediate response concerning the quality of the products (Knox, 2008, 135). By selling the products to customers directly, the reach and development team are able to use the feedback to realise the deviations that need to be improved on . the company will also be in a position of doing a follow up on the customers that have purchased their products and evaluate their level of satisfaction. By collecting all these information, the company will know the customers value in the appreciation of the products (Fanning, 2005, 42). Direct selling is doing well for the company as they are able to identify potential customers and meet new customers. The strategy enables the company to solve problems that are related to the products and help train the customers on how the product can be installed to ensure good appearance. Conclusions According to the market research, Teragren company is on the right path of being the key player in the supply of quality, durable and smart bamboo products for flooring, countertops, table tops and veneers (Gofton & Ness, 1997, 245). Since the global economy is keen on the production of goods that are environmentally sustainable, the company is definitely taking over from those that are still clearing forest for timber to produce the same products. The company flexibility in design, economical and efficient products make it more preferred in the market (Birn, 2004, 214). Most importantly, the company should maintain the standard of the materials and not down cut on production cost and start producing products of low quality. Quality, performance and environmental sustainability being the company policies, the production team ensures that the products undergo through a quality check before being released into the market. All the strategic plans under marketing analysis are to ensure that the company gain a larger portion of the market share and prevent the importation of other similar products into the market (Biró & Biró, 2005, 146). Reference list Beall, A. E., 2010. 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