Le Petit Chef Case Study Solution
Executive summary
This is a French appliance kitchen company, which was established in 1989. The value proposition was to take the art of French microwave cooking to a new level. The company produces all kinds of counter top, kitchen appliances, however its main focus is on microwave. The 60% of sales and 85% of revenue are from the microwaves.
The company has total 600 employees where 35 of them make microwaves. The operating structure is designed to deliver high-quality products, reliable delivery, and lower costs. The company has a strong control over the supplier and outbound logistics. The company has developed its own heavy research and development department and continues bringing improvement in manufacturing processes. Automated facility tend to result in lower labor costs and ensured product quality.
The mission statement of the founder is to build microwaves that would take the art of French microwaves cooking to new levels.
The company has the opportunity to differentiate itself from the competitors because its competitors launch their products at low price, and that launching products at a low price would affect their quality therefore, the company can differentiate its product by producing high quality products, for which the customers would be willing to pay premium.
The company faces a usual challenge as to how to keep emerging in a mature industry when bringing differentiation although innovation is more expensive whereas, the profit tends to reduce because of increased competition. The microwave oven has been a disrupting technology. For a mature technology, it is more a theme of optimizing the innovation and implementing the correct processes to arrange in a line research and development and Marketing. The company needs to be innovative to ensure their strategic positioning to match their processes and the cost formation. They also might want to move forward for a disruptive technology to gain competitive advantage.
On the other hand, the company's performance seems to be low because the prices of the microwave are decreasing every year due to high competition whereas customers are going towards cheaper supplier.
Le Petit Chef Harvard Case Solution & Analysis
Situation overview:-
The company is facing intense competition from the Asian manufacturers as they produce low priced microwaves in the European markets, and due to the competition the price of the microwaves reduces by 10% on a yearly basis, which has resulted in the company being unable to compete with them on the basis of cost. The industry is mature since everyone wants to get higher market share......................
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