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Foxy Originals is a successful Canadian jewelry manufacturer and distributor. It is thinking of expanding its market and entering the U.S. It must plan its strategy and come up with the best way to do it.
Elizabeth M.A. Grasby; Nina Gupta
Harvard Business Review (907B04-PDF-ENG)
May 15, 2007
Case questions answered:
- Discuss the pros and cons of each sales channel.
- Compute contribution margin for each channel.
- Compute the break-even point (in terms of orders and dollars) for each distribution channel.
- Discuss the company's future scope.
- Should Foxy Originals have to use a sales representative model or a US Trade show?
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Case answers for Foxy Originals - Expansion into the U.S. Market
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Foxy Originals started in the year 1998 by Jen Kluger & Suzie Orol. Both the founders met each other when they were doing their course in “Unversity of Western Ontario.” Both of them had a passion for designing because both of their families were doing business related to metal and jewel designing and manufacturing.
Initially, they were selling the jewels to their college friends and others and then selling to retail shops. In three year of operation, the company doubled its sales every year and were in the fast-growing phase.
The products Foxy Originals was selling are necklaces, earrings, bracelets, and rings. Their target customers are women in the age group between 18 to 30. They categorized their customer into three categories. They are reversible enamel ladies, chain-loving ladies, and bridge ladies based on their interest in jewels & fashion.
Their current market in Canada is matured, and they wanted to start their business in the US market, which is 10 times bigger than the Canadian market. They have to decide whether trade shows or sales representative methods to get to buyers for the new market.
2.0 Strategic Context
2.1 External Environment
The porter five force model helps in the detailed understanding of the jewels designing industry from a different point of view like who are the buyers, sellers to the company and also are there threat to Foxy Originals because of the competitor, new player or new product which can replace the company existing product (Porter, 2008).
2.2 Internal Environment
The competitive advantage of Foxy Originals based on the value chain analysis helps us to understand the company’s competitive advantage over its competitors like what they do something different from the other players in the market. It will look into the company current operation, technology implemented, marketing, advertisement, logistics, and so on (Porter, 1985).
2.3 Strategic Direction
Foxy Originals’ vision is it comes up with high fashion products and make it available to women. So their objective is to design a new product which attracts all women in the age group between 18-30. Their products should cover the different tastes of the women like more fashion, a good return on investment, and professional-looking jewels which are not that catchy.
The Foxy Originals was trying to…
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