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Main activity: VSM AB developed, manufactured, marketed and sold household

sewing machines
-. Old fashion Asccounting system
-. Under the strategy of Electrolux
-. Vague idea about how much they spent on marketing of specific products
Before 1997: VSM belongs to Electrolux
-. Electronic Computerized models were manufactured at the Husqvarna
viking (HV) plant in Sweden,
-. Low-priced mechanical machines and over-lockers were sourced from
Asian manufacturers
-. New mission statement
-. Retailers were very important to VSM in their new plans for future
profitability (programme to transform the retailers into Dealer-Partners) .
After 1997 : Electrolux sold VSM division to Mr. Runnquist:
-. In the US, VSM started to cooperate with Jo-Ann Fabrics & Crafts, a large
retailer of fabrics with over a thousand stores nationwide.
-. VSM had opened 47 exclusive Husqvarna Viking (HV) shops in the US
-. The aftermarket included services, such as training in sewing techniques,
software for embroidery construction and ready-made embroidery patterns.
-. New commitment to think more about the customer and less about
technical features.
By 1999:
-. VSM did start a web-shop for low bulk accessories and software on their
-. The area retailers were given a bonus based on web sales to clients within
their assigned area
-. Very little information was collected by official bodies and VSM cooperated
with competitors to collect figures on volume in different price brackets
through a third-party intermediary
-.Being Japanese, their location gave them access to low-cost
production facilities in, for example, Taiwan, Thailand and Korea.
However, this seemed to be a mixed blessing since the competition
from local low-cost brands was fierce for modestly priced mechanical
sewing machines.
Competitors USA: Brother, Janome and Juki were all major competitors to
VSM. ( medium-sized manufacturers, primarily acting as OEMs7 for
established brands in the lower price bracket )
Competitors In Europe, the VSM Group and Bernina Fritz Gegauf AG
In the period 2000 to 2003:
The strategy document was
often referred to for guidance
on operational matters and the
mission statement was
frequently promoted in the
companys public relations.
There have been
tremendous changes in
VSM since Svante
[Runnquist] came here,
there really have. But we
may change all we want;
the customer only meets
the retailer and as long as
the retailer doesnt change,
the customer wont
perceive any change at all.
VSA Group
martes, 08 de abril de 2014 04:38 p.m.
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-. Pfaff and VSM: 2000. The combined company was renamed the VSM
Groupto avoid any confusion with the groups brand names and a new
company slogan was coined Changing the World of Sewing.
-.Pfaff dominated the Germanspeaking markets (Germany, Austria and
-. Pfaff was losing money in its home market in a big way. In an
effort to defend its market share in all segments, Pfaff had successively
lowered their prices to meet the competition from Asian manufacturers.
It turned out that Pfaff had grossly underestimated the costs associated with
the German market and had incurred substantial losses for years
-. The solution was to pull the brands apart on other dimensions than price
and quality. This meant keeping a full product range under each brand. To
illustrate the difference in market offer, VSM developed dedicated key words
for each brand. While Husqvarna Viking kept their innovative,
family, caring and fun, Pfaffs new keywords were elegant, individual
and sophisticated. While the Husqvarna Viking brand sported pictures of
families in the warm colors of red and yellow, Pfaff portrayed young
professional women in cool surroundings in blue and green hues
-. They moved production from Karlsruhe (Germany) to the Swedish
uskvarna plant.
-. Moving production from Karlsruhe to the Swedish Huskvarna plant. Zetina
were secretly invited to the Husqvarna site for a meeting and an offer they
could not refuse. The VSM group offered to buy the Czech company, take
over all personnel, and hire the owners as managers for the new company
Problems in 2004:
The VSM effort to expand in the US market by setting up store-in-stores for
the Husqvarna Viking brand in collaboration with Jo-Ann Fabrics had
expanded rapidly 120 stores
When VSM decided to continue Pfaff and Husqvarna Viking as two separate
brands with separate product programes, they also created potential for a
clash especially when trying to cut costs by coordinating marketing and
distribution activities
Problem solving Model
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-. Manufacturing: USA, Sweden, Germany (One year) and Check Republic
-. Check republic: Costs efficient
-. Higher costs of transportation between countries overseas.
-. They bought a company on bankruptcy because the lower price
Social cultural
-. Western hemisphere demand were declined
-. Adapting to new technologies (Internet, web sites), demanding for the customers
-. New models contains high tech technology making them lead on the market
-. Taking advantage with the breakthrough of the web,
Porter Forces
-. Almost any information about the market
New Entrants
-. Until now we don't have new entrants , so is not a threat
Power Buyers
-. They have the power of choosing with product prefer, because in the market the offers is large
(Japanese products)
Substitute products
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Substitute products
-. We don't have a clear idea about this point. May you can help us a little.
Power of suppliers
-. This case don't give specific information about it. We assume that they are not having issues with
Rivalry among existing competitors
-. Exits the Japanese substitute brand that represents a threat to the VSM group
-. USA: Japanase (Janome: Volume, Brother: Innovating product to lower prices, Juki (Being more
specialized on sewing machines)
-. Europe: Bernida They well known but since 5 year they are going down..
Should we combine Pfaff and Husqvarna Viking in
the same store?
The final question to resolve with all the information gave it :
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