SRKS Guitars doesn’t have a strategy to set their product firmly and sustainable in the guitar market. The symptoms of this problem can be seen in the slow logistics of shipping and assembly of the products that were not matching the order deadlines and also the high costs that involved the full process of guitar development and advertising compared to the low perception of earnings that the company feel at that moment. The alternatives for the company are the following: ) RKS must stay with their actual Marketing and Distribution arm, Hohner. * Pros (+): I) Established distributor of musical instruments: This means that the company has contacts and networks that could make the brand immersion into the market easier. II) RKS won’t need to make their own investment in information and other investigations, as this will be their partner’s work. III) RKS can focus their work in improving their products and processes. * Cons (-): IV) No Tangible contribution of Hohner into RKS Guitars results yet.
V) Opportunity cost of having all the faith set in Hohner and not exploring other potential partners. VI) Not involving the company in the market research will establish comfort in RKS that could be harmful in the future. 2) RKS must end their bonds with Hohner and find another Partner. * Pros (+): VII) A new partner could be a door to a different approach of the product that can be complemented with the learning that RKS got from their work with Hohner. VIII) A new partner could mean newer and better ideas for the brand.
IX) A new partner could mean a new business structure that could be translated to better profits in the short term. X) If RKS is not feeling comfortable with their actual results, a fresh start can work as a relief for the company that had a lot of doubts of their results with Hohner. * Cons (-): XI) A new partner means adaptation time to accomplish synergy. If RKS wants to match their deadlines, they have to keep these times at their minimum. XII) Possibility of wrong decisions and misunderstandings. XIII) Different points of view of the same business. ) RKS should itself take on the marketing and selling responsibilities. * Pros (+): XIV) Complete immersion in the product developing. XV) Product will get due attention. XVI) Product development and advertising will be in the line of the company’s belief. * Cons (-): XVII) No real experience of the Company in these areas. XVIII) Time and money invested in market research, instead of outsourcing. 4) Find a buyer that could license their design. * Pros (+): XIX) Money for development and improvement of the brand.
XX) Use buyer’s market position to get into the customers. XXI) Support from a big firm helps for brand awareness and quality of RKS products. * Cons (-): XXII) Possibility of having the project buried or shelved by the Buyer. XXIII) Loss of RKS power into product making with their ideals and beliefs. XXIV) Decision power of the Buyer against RKS. My recommendation for RKS Guitars is a mix of number 2 and 3. Finding a new partner can help to clear the wrinkled path and doubtful sensation that RKS had about how the product was developing.
Also, adding new ideas into the business works as a complement to all the learning that RKS had with Hohner, adding value to the product and exploring new ideas that in other scenario could be difficult or impossible to get. To increase the value of the product, in the process of finding a new partner, RKS should invest in knowing the market and all about the responsibilities that involve marketing and selling, to increase the awareness about what they are doing and what to expect of their partner, to develop ideas based in the understanding of the business and not only in the trust of outsourcing this process.
This alternative doesn’t mean that RKS Guitars have to work alone but they have to feel and learn the importance of the marketing and selling partner, to lead to better results. You can’t expect to dominate your business if you don’t understand the different levels of the process, when also some of then can be the key of success. 1) Cut the bonds with Hohner. 2) Invest in market research for understanding Marketing and Selling operations, while looking for New Partner candidates. 3) Join the Partner with the better synergy with the company’s beliefs and expectations.