Reply these 4 sentences
1.Looking at the above case, it is clear the Schoolstuff is facing stiff competition from Chinese competitor. This is not an ideal situation for the company, as it is hard to compete with someone whose prices are about 30-40% lower that the Schoolstuff price. I think the company should think about developing a different distribution model. Presently, the company provides quotations to dealers who would put their own mark-up and then present the quotation to the contractors. The contractors in turn will add their mark-up and prepare the bid to be accepted by the schools. Clearly, the final price of the product would be more than the price of the finished product. Therefore, yb eliminating the middle man, the company can become competitive regarding price. At the same time, the company also needs to investigate the distribution model of the competitor.
2.This is such a common problem for many product retailers, many people today only look at price instead of looking at quality. Lowering prices and engaging in competition can get ugly so sometimes its not good to engage in it unless absolutely necessary. Instead of lowering product quality and in return lowering prices, businesses need to find a way to stand out and show their product in a higher light. One way of doing this could be by providing great customer service. Schoolstuff has already provided value in their product but it may be beneficial to provide a warranty saying “we believe in the quality of our products so much that we will give you a 10 year warranty.” This could help swing consumers because they know that if anything ever goes wrong they have someone backing the product.
3.First, I think in general it will be hard to compete with a company that has cheaper prices of 30-40%. I know something that i would stress to the supplier is the quality of my supplies and also something I would try to do is get alot of smaller contracts with the smaller school companies because if you get enough of those than that could possible make up the difference for not being first on the list to get the most expensive contract .
4.The first idea that pops into your head to compete with lower prices is to use cheaper materials to lower your prices as well. It is the easiest way to lower costs but it is not always the best option. Schoolstuff is already recognized for the high quality of their products so they shouldn’t change and sacrifice the quality just to have lower prices. This would upset their current customers who are accustomed to the high quality that is associated with their products. They need to find other ways to lower costs so they can lower their prices to compete while staying a profitable company. Cutting overhead costs is a good place to start saving money. Whether this means cutting hours for employees or even firing some employees, it can save the company money. Companies have to be careful when cutting back on overhead though because they don’t want to hurt their companies performance. An alternative to firing employees would be to relocate somewhere with cheaper labor to lower costs as well.
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