Strategic Management

Topics: Mergers and acquisitions, Cost Pages: 7 (1947 words) Published: June 4, 2012
Strategic Management

Question 1 : You are in the business of jewelry making since generations and your business is flourishing; now you are planning to expand your business globally. What Strategic options will you chose for entering and competing in Foreign markets? Answer :

Establishment Name: Sri Mahavir Jewelry, Estd. : 1938
Jewelry has been part of human civilization for a long time. And today, jewelry is used as symbols for celebrations such as engagements, wedding, and anniversaries. It is also used as symbols for communication and symbols for identity and individualism. The jewelry retail industry has changed and exhibited growth over the past decade due to increasing income and demand from the emerging economies across the world. The USA remains as the largest consumer for jewelry, followed by China, the Middle East and Japan. The UK and Italy are the largest consumers in Europe.

Sri Mahavir has already established their businesses based out of Johri Bazar (Jaipur) and have more than 30 branches across India. Hence this is the right time for Sri Mahavir to expand new avenues in global jewelry retail business. Thus the firm has decided to analyze global jewelry retailing business and growth strategies to be able to draw conclusions on whether the business model and strategic decisions have an impact on the company’s profitability.

The characteristic of jewelry retail market is a trend towards consolidation with large international players accumulating more and more market share. Market players in this industry include a variety of retailers ranging from small specialty retailers to large international retailers. The large retailers benefit from economies of scale and have the ability to compete on price more intensely. However, small retailers also can be successful by specializing in particular product ranges. The jewelry retailers include some large department stores, supermarkets, hypermarkets and smaller specialty stores. There are a lot of potential buyers/ customers in the jewelry retail market as well as retailers. Therefore, brand loyalty is important in this market. The brand identity is a major factor in determining the price of a product. Most buyers are willing to pay more for brand name jewelry. The retailers also can differentiate their product by offering products made of varying metals and stones, working with well-known designers or launching exclusive branded merchandise. Jewelries may be produced in-house or purchased finished ones from manufacturers. Retailers/ companies may purchase gemstones and precious metals used in making jewelry from several sources. Purchases are often from suppliers, which retailers have long-standing relationships and contracts.

Proposed value chain: (Adapted from Porter’s Value Chain)


Inbound and Outbound Logistics
Inbound logistics activities includes receiving raw jewelries/materials from suppliers, storing these raw jewelries, and cutting and polishing some or all of these raw jewelries before these materials are developed into finished jewelries within company. Inbound logistics also includes jewelries sent for exchange or return from the customer. Outbound logistics includes activities concerning inspection of finished jewelries before sending to customers, order processing, documentation handling, and scheduling/ delivering of shipment to foreign customer/ the company’s final customer. Sri Mahavir will outsource the logistics depending on the total value of the shipments, different logistics providers, such as UPS, DHL, and FedEx etc.

Operations activities are related to the production of the jewelries. The production starts with design concept as different customers are looking for different products. In order to differentiate the products from the competitors, Sri Mahavir will create their own designs through customization or markets. For the uniqueness/differentiation purpose, the company will brand the new design...
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