Fall 2018 Take-Home Exam 1 Name Answer

Fall 2018take Home Exam1 Name Answer Thetake Ho

The assignment requires an analysis of ABC Glass's market competitiveness, specifically examining their performance in both non-exclusive and exclusive dealership channels. The task involves conducting market share analysis, comparing effectiveness across different dealership arrangements, and hypothesizing reasons for observed discrepancies. Additionally, it is necessary to project expected in-store market share figures and develop creative explanations for differences in market performance between the two channels, based on provided industry data and case specifics.

Paper For Above instruction

ABC Glass operates within a highly competitive sliding glass door market in the United States, which is part of the larger US door industry valued at approximately $90 billion, with sliding doors constituting about 5% of this market, or roughly $4.5 billion (Statista, 2018). As a small but specialized manufacturer, ABC’s market share within its target segment and its channel effectiveness are vital indicators of its strategic success. This analysis dissects ABC’s competitiveness in non-exclusive and exclusive dealership channels with the aid of market share calculations, comparative assessments, and strategic hypothesis formulation, grounded in the details provided by the case study and industry data.

Market share analysis in non-exclusive dealerships

In the non-exclusive dealership channels, which account for 30% of ABC’s total sales amounting to $2.76 million, the typical in-store market share for brands displays a clear hierarchy: roughly 60% for the leading brand, 30% for the second, and 10% for the third (Adams & Johnson, 2017). Considering ABC's indirect access to consumers through multiple dealers, its market penetration highly depends on dealer preferences and local brand competition dynamics.

Assuming ABC's current market share within non-exclusive channels reflects common industry positioning, it might be relatively low. If ABC's in-store market share in these non-exclusive dealerships is approximately 10%, aligned with the third brand level, then ABC’s estimated sales through non-exclusive channels are around $276,000. This suggests ABC is a minor player in such settings, likely due to limited brand recognition or weaker dealer relationships compared to dominant brands.

Market share analysis in exclusive dealerships

Within the exclusive dealer network, which accounts for 70% of total sales ($6.44 million), ABC operates under a “reciprocal exclusivity” pattern with 50 markets. Only one dealer per market sells ABC doors, effectively making each exclusive dealer a primary representative for ABC in that area. Given the exclusivity, ABC's market share in these markets can be estimated by examining sales volume and dealer coverage. If we surmise that the total sliding door sales in these exclusive markets are proportionally aligned with overall market data, then ABC's share depends on its dealer’s performance and brand influence.

Suppose ABC’s exclusive dealer sales constitute about 60% of each dealer's total window of product offerings, consistent with industry trends where exclusivity enhances brand focus. If each dealer contributes equally, ABC's market share in their exclusive channels could be as high as 20-30%, depending on the competitive landscape and dealer commitment. For a conservative estimate, assuming ABC captures approximately 25% of the exclusive dealer market, its sales would be around $1.61 million, which is significantly higher than in non-exclusive settings.

Comparison of effectiveness across channels

The comparative effectiveness reveals a notable disparity: ABC’s estimated market share and sales volume are higher in exclusive channels than in non-exclusive ones. This is consistent with strategic observations where exclusivity agreements often enable manufacturers to exert more control over branding, pricing, and customer experience, leading to higher market penetration. Conversely, non-exclusive channels tend to be more fragmented, with multiple competing brands sharing shelf space and dealer influence, diluting ABC’s presence.

This discrepancy might also stem from dealer loyalty, promotional support, and product positioning strategies that favor exclusive relationships. Exclusive dealers are often motivated to push the manufacturer’s brand to maximize their own returns, benefitting ABC through better shelf positioning and dedicated sales efforts. On the other hand, non-exclusive dealers distribute multiple brands, which can hinder ABC’s visibility and prioritize more established competitors.

Expected in-store market share in non-exclusive dealers

Based on the typical in-store shares, ABC’s expected market share in non-exclusive dealerships is around 10%. Considering the dominant brands’ shares of 60% and 30%, ABC’s smaller presence results from factors such as lower brand recognition, limited marketing efforts, or less aggressive dealer support in the non-exclusive mode. If ABC wishes to increase this market share, strategies could involve strengthening dealer relationships, enhancing brand visibility, or offering competitive incentives for non-exclusive dealers to prioritize ABC products.

Hypotheses on discrepancies between observed and expected market shares

Discrepancies between the observed (or estimated) market shares in non-exclusive versus exclusive channels can be attributed to several strategic factors. Firstly, channel control significantly influences market penetration; exclusive arrangements allow for targeted marketing and brand reinforcement, leading to higher share levels. Secondly, dealer incentives and loyalty programs often favor exclusive arrangements, motivating dealers to push ABC’s products more effectively.

Thirdly, consumer perceptions and brand loyalty are typically stronger when a brand is associated with a dedicated dealer or exclusive outlet, which reinforces customer trust and preference. Conversely, in non-exclusive settings, ABC may encounter fierce competition from established brands, limited dealer support, and lower consumer recognition, all hindering market share growth. Lastly, operational resource allocation by ABC could favor exclusive channels due to the higher potential for coordinated marketing and sales efforts.

Creative hypotheses for market share discrepancies

Hypothetically, if ABC could implement targeted brand-awareness campaigns and dealer support programs within non-exclusive channels, its market share could increase from 10% to possibly 20%, capturing a larger segment of the installed base. Additional creative strategies might include loyalty programs, co-op advertising funds, or technical support for dealers to promote ABC products more aggressively. Such measures could bridge the gap, elevating ABC’s brand visibility and consumer preference in mixed dealership environments.

Conclusion

Overall, ABC’s competitive positioning is markedly stronger in exclusive dealership channels, driven by strategic control, dealer loyalty, and more focused marketing efforts. The lower effectiveness in non-exclusive channels reflects channel fragmentation, competitive pressures, and lower dealer advocacy. Recognizing these dynamics enables the company to develop targeted strategies for increasing its market share across all dealership types, including a focus on strengthening non-exclusive dealer relationships, boosting brand awareness, and leveraging marketing incentives. Future growth depends on effective channel management, enhanced dealer collaboration, and innovative marketing initiatives driven by a clear understanding of market share drivers within each distribution mode.

References

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