Aqualisa Quartz Harvard Case Solution & Analysis

Problem Statement

Aqualisa has succeeded in creating a product which is innovative and is the ultimate solution of every consumer in the market. Beside other problems, consumers were most irritated by the poor pressure and varying temperature on top, which was solved by the new product of Aqualisa, the Quartz. Despite the creative thinking and having solution to nearly all the problems, customers were not attracted towards this product of the company. The sales were extremely lower than expected when the company had already spent a lot on the research and development of this product.

aqualisa quartz case solution

aqualisa quartz case solution

Aqualisa has a first mover advantage for its Quartz but the company is expecting this technology to be replicated by the competitors in two years’ time. So, the company must hurry to push out its sales as early as possible.

Reason

The sale of showers was heavily dependent on the recommendation of the plumbers that were called to install the machine in homes. The reason, why the company was not able to increase its sales level was that it could not motivate the plumbers to install this product. It was a fact that once the plumber was convinced to install just one product, he would become a convert.

The other factor why the company was not able to increase its sales was that most of the sales force was committed to retain the relationship with the existing customers. It was important because 44% of the installation in the UK market was for the replacement purpose. Thus, it was important to retain the existing customers. This left only 10% sales force to target new customers and sell this newly developed product to the target market.

If the sales force pushed the new product to the old customers then a situation of cannibalization would occur and the sales of the new product will replace the sale of the existing product, which will not be as beneficial for the customer as it would be to attract the new customers.

Analysis

The internal analysis (Exhibit 1) and External Analysis (Exhibit 2) of Aqualisa described the strengths and weaknesses of the company along with the opportunities and threats that the company is facing. The EFE Matrix (Exhibit 3) and IFE Matrix (Exhibit 4) help the company to decide the most important factors for the company to come up with the marketing strategies.

Thus, it is clearly identified that major opportunities that the company can capitalize on is the rare breakthrough in the shower market and the need for innovation in the market. Aqualisa has been successful in catering to these opportunities by the launch of Quartz product. The major Threat for the company’s product was the difficulty to install the machine. Aqualisa has been able to cater this threat as well. However, with the company’s strength of quality product and high services, it is not able to create brand awareness and the plumbers are also reluctant to switch the brand.

With the help of these analysis tools, the company’s SWOT analysis (Exhibit 5) is done to develop particular strategies that can maximize the strengths and opportunities and reduce the weakness along with the elimination of threats. According to the Ansoff Matrix (Exhibit 6), the company has made enhancement in the product but the relative market is same. So, Aqualisa has used product development strategy. In this strategy, there are high chances of cannibalization if proper target market is not communicated.

The Competitive Profile Matrix (Exhibit 7) and the Porters’ five forces model (Exhibit 8) of the company depicts the fact that Aqualisa has a higher profile than its competitors because of the factor which is very important in this field, the research and development and innovation.

According to VIRN (Exhibit 9) Quartz is valuable and rare but not inimitable and non-substitutable. So, Aqualisa must act fast. The company lies in the fourth quadrant of grand matrix (Exhibit 10). According to the BCG matrix (Exhibit 11), the company’s current product is a Cash Cow but the company’s new product, Quartz is a question mark. It will soon enter into Dogs matrix, if proper marketing channel is not prepared by the company.

Alternatives

The company should target the plumbers because they are the ones that recommend the individuals to choose a brand. It is visible that the plumbers tend to recommend the product which is familiar to them because unfamiliar products could present unknown performance problems and the fuzzy installation will lead them to a second visit that is paid from their own pocket.  Thus, launching programs to gain loyalty from the plumbers will be beneficial in increasing the sales. However, the company is finding it very difficult to reach the plumbers.

Alternative 1: Targeting and Selling To Consumers Directly

This is a high risk and high-return option for the company. The company’s position is quite stable at this point, so taking any step which is risky might not be beneficial for Aqualisa. The costs for this type of promotional campaign will be high but the resulting net income is also expected to increase.

Alternative 2: Focusing On the DIY Market

The company will have to enter into forward integration to make better relationships with the B&Q that can push the company’s product more. At the current moment, Aqualisa has a

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