Rajinda Jayasinghe (A0090911) Marketing Management (FM2)

Franz Collection, Inc: The Road From Subcontracting To Brand Marketing Franz Chen, CEO of Franz Collection Inc., is thinking about the aggressive expansion of his already successful home dcor business in the wake of a major competitors recent demise. While a detailed analysis of this issue cannot be considered within the scope of this short paper, a discussion of the key strengths, weaknesses, threats and opportunities (SWOT Analysis) that face Franz Inc. will be discussed. Brief recommendations will follow. Strengths Strong existing international networks and partners that trust the Franz brand for its creativity and quality (Germany, USA, UK, Japan) Keen understanding of unique customer cultures bolstered by the ability to shape products to meet these distinct customer preferences Low cost, mass production in China allows for competitive edge in global markets (though premium pricing should be considered to add value to the Franz brand name globally) Ability to meld Chinese cultures with Western cultures and maintain both unique and mass appeal. (eg. Papillon butterfly) Fuses historical Chinese heritage with more progressive trends Existing infrastructure for market feedback, analysis of trends, idea screening and adaptation of products accordingly. Efficient and progressive use of technology to lower costs and improve quality despite mass production (eg. 3-D mold sculpture). Franz does not lose touch of its artistic roots and ensures that key aspects of the product are still handmade. Consultation and expertise from industry experts with skills and reputation (eg. Chao Sun for glazing consultation) Multiple awards will contribute to brand credibility and support any marketing initiatives undertaken Weaknesses Comparatively less expertise in porcelain products and silk Seagull previously had its doubts about being able to predict consumer demand, identify customer preferences, determine value propositions, set up distribution channels, position the product and promote it to end users this might imply a lack of in-house capacity in these areas.

Uncertain whether the company would have the money required to launch a global marketing campaign that may necessary to build brand recognition. Some retailers are not currently conveying the Franz brand spirit (eg. Chens experience in California)

Opportunities Potentially huge increase in customer base Diversification of product line will reduce risk of company failure if existing products begin to falter. Porcelain is a growth sector. Tabletop sector is a premium sector and offers very high margins Acknowledged high quality may allow for premium pricing and higher margins across the global lines.

Threats Political and social events may trigger negative reactions in western countries which may trigger indirect, but negative, associations with Franz products that fuse Eastern concepts. Other players in porcelain and silk industries are already well established and well known Global Financial Crisis may reduce overall demand and make attraction of new customers to a premium brand more challenging All in all, Franz Incs high quality products, existing network and a sound needs-based philosophy renders it well suited to further expansion. Franz should leverage these strengths in order to: 1. Expand to further markets in the Western (Europe, USA, Russia) for porcelain and furniture. 2. Do not expand into Silk but rather stick to existing competencies. The case does not make a convincing case for Silk and therefore is not a recommendation here unless Franz possesses the skillset needed to produce products of a quality that would not let down the existing brand image. 3. Expand and target Asian markets too (with suitable pricing) with a focus on upper and middle class populations. Franz can leverage its knowledge of Asian culture to produce effective lines of items.