Data Bases • Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism? Links • Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com Free Essays • Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers	Search Lots of Essays Back to Subjects - Economics Case 6 8211 SALOMON THE MONOCOQUE SKI Case 6 8211 SALOMON THE MONOCOQUE SKI ‘SALOMON S.A. a fast growing French company is the world leader based on its sales in winter sports equipment. Started as a small producer of steel edges for ski, the company always aiming at improving its position in each of its market areas. Number one in ski-bindings market with 46% market share, number one in cross-country boots and bindings with 30% market share and number two in alpine ski boots. Salomon’s sales were distributed around the globe – North America and Europe hold the highest percentage. The company was heavily involved in competitive events in winter sports and golf. Salomon’s management philosophy is based on three basic principles: partnership with employees; cooperation with suppliers and distributors; innovation for customers. In 1984 Salomon, the world’s largest company in the winter industry which produced ski equipment but ski, decided to enter the ski market. Being in financial healthy situation, having most advanced design tools, know-how in automation and strong brand image and distribution network, Salomon could afford high R&D expenditure to develop radically new ski, namely the monocoque project. Started off in 1985 the secret project took 2 years to be completed. The prototypes that had been developed through numerous trials and tests were showing promising potential. A mission statement should identify generally the firm’s business-the basic type of product or service offered, its approach to growth and profitability and its markets. In other words, a mission statement is the company’s self-concept – how it sees itself functioning on the market and the image it wants to achieve. The mission statement should be clear and should keep its relevance to the new conditions in the changing environment. It should provide a direction for the firm for the next 10 years. The firm’s mission statement should consist of five elements (P.Kotler). The first is history. Every company has a history of aims, policies and achievements. When defining the statement the organization should be close to its past history. The second consideration is the preferences of the owners and management. Those who direct the company have their personal goals and visions. Third, environmental factors influence the firm’s mission. The environment defines the opportunities an treats that should be considered. Fourth, the company’s resources make certain mission possible and other not. The last element is that the firm should base its choice of objective on its distinctive competences. Firms develop their mission statement in order to share them with their managers, employees and customers. A well-formulated mission statement provides company personnel with a sense of opportunity, direction and achievement. The company mission statement can act as “ an invisible hand” that helps managers and employees to achieve the company’s goals. Also, the mission statement should be motivating. Employees need to feel that their work is significant and contributes to people’s lives. According to the points mentioned above a possible mission statement of Salomon may be the following: SALOMON started as a small producer of steel edges for skis. At present, we are a world leader in ski equipment with strong brand name and distribution network. Thanks to the innovations implemented and our excellent relationship with suppliers and distributors we are able to offer radically better ski, safety bindings and reliable boots. The goal of each organization from owners and management point of view is maximizing profit. However, many firms set mix of objectives (sales, marketing, reputation) by which they pursue the final objective. In our case objectives for Salomon could be the following: - to become a world leader in 5 years in the medium and top segment of the ski equipment market - to give skiers a piece of equipment with a “plus” based on some visible innovations - to emphasize partnership with distributors on order to provide optimal quality service The mission statement and objectives help the business define its environmental needs. Managers know which parts of the environment to monitor. In this way, they can understand whether their business achieve its objectives or not. In our case the management of Salomon should monitor: - the strategies of current competitors as well as the entry of new ones - new or changing distribution channels for selling ski equipment In general, the company has to monitor both macro (economic, technological, social) and microenvironment (customers, competitors, suppliers) factors that affect its business. The company has to identify these environmental factors and set up an “intelligence system” in order to recognize major trends and important developments. Then for each trend managers should detect opportunities and threats for the company. Opportunities should be classified according to their attractiveness and success probability. The latter depends on whether its business strengths match the requirement for operating in the target market and exceed those of its competitors. The company has to generate the greatest customer value in order to achieve competitive advantage. Opportunities for Salomon are shown on the following opportunity matrix: 1. company develops radically different ski 2. company develops much lower cost ski 3. company develops ski with new design 4. company develops bizarre color ski Looking at the figure above, the best opportunity for Salomon is in the cell 1, and management should prepare plans to pursue this opportunity. The opportunity in cell 4 is not important to be considered. Cell 2,3 should be monitored in case they improve their attractiveness and success probability. In order to prepare complete opportunities and threats analysis of the external environment the following information may be required: - information concerning future merges or acquisitions of companies in this field - expected positive or negative trends on the ski market, etc. The management of the company needs analytical tools for classifying its business by profit potential. This can be done by using portfolio analysis. It’s a method of analyzing the company’s mix of businesses in terms of indirect and direct contribution to the strategic objectives. One of the widely used portfolio models developed in 1970 by the Boston Consulting Group (BCG) is market growth / market share matrix. On the figure shown below the vertical axes indicates the annual growth rate of the market in which Salomon operates. The horizontal axis refers to the market share relative to that of the largest competitor. It serves as a measure of the company’s strength in the relevant market. Salomon is a market leader in ski bindings and cross country boots, respectively 46% and 30% market share. Other cash cows are winter clothes and “Taylor Made” golf equipment. After completing the Monocoque project, the latter will appear first as a question mark. However, because of its potential and radically innovations it will transfer to the Star-cell very soon as a market leader with a high growth rate. Salomon has four cash cows which make its business very stable. There is no information in the case whether dogs exist. Based on this we can conclude that Salomon has balanced portfolio. According to the New BCG Matrix, Salomon can be characterized as accompany from the specialized industry i.e. the company faces many opportunities for differentiation and each have a high payoff. Bibliography: Case 6 – Salomon: The Monocoque Ski Keegan, Moriarty, Duncam – Marketing, 1992 Kotler – Marketing management, 1988 Word Count: 1215
Copyright © 2005 College Term Papers, INC All Rights Reserved.