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Lancer gallery case study copy


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  • 1. Lancer Gallery I. Summary of Facts A. Market – Native Artifacts/Jewelry/Pottery and Replicas 1. Knowledgeable buyers/collectors a. Native craftspeople b. Replica buyers c. Clients 2. Consumers a. Gift buyers b. Individuals looking for decorative items c. Sole suppliers 3. Economic market a. Monopolistic Competition b. Oligopoly (few products) B. Product 1. South American and African artifacts a. Jewelry b. Pottery c. Replicas of authentic artifacts 2. Benefits a. Pleasure/Personal use b. Adding to collections c. Historical aspects d. Want authentic artifacts e. Currency/monetary value f. Use for a gift g. Decorations 3. PLC a. Growth Stage b. Maturity Stage C. Price 1. Replicas generate small portions of total sales 2. Artifact prices fluctuate depending on item 3. Gross Margins are $35 million 4. Constant rate of 20% per over last decade 5. Elasticity a. Relatively inelastic b. Relatively elastic D. Promotion 1. Firm-sponsored shows 4. Expansibility a. Relatively nonexpanisve b. U.S. based with few locations and competitors E. Place 1. Locations: a) Phoenix, b) Los Angeles, 2
  • 2. c) Miami d) Boston 2. Distribution centers: a) specialty dealers b) firm-sponsored showings c) exclusive department stores 3. Channel: Lancer Gallery - Agent - Dealer - Consumer/User F. Other 1. Lancer Gallery's Competition a. Increased competition with eleven competitors b. Added three more buyers to compete c. Customers sending out their own buyers to work with native sources d. Pricing fluctuating due to selling fake items by competitors e. Internet competition 2. Lancer's National Standing Reputation a. Careful verification of authenticity on products b. Good quality c. Respected source of artifacts d. Long-term contracts with Native craftspeople 3. Political and Government Problems a. Limitation on supply b. Governments want less exporting c. Government want national significant artifacts in their own countries d. Artifacts are not easy to get II. Problem/Opportunity A. Primary – Contract with department store B. Secondary 1. Limited supply of artifacts 2. Increased competition 3. Declining revenue due to economy III. Recommended Action A. Primary – Agree to contract with merchandise department store B. Secondary 1. Create higher volume of replicas 2. Expand to other countries outside South America and Africa 3. Merge or acquire another competitor