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I supposed challenger's strategy of developing the Valore brand is not wrong, maybe just 1 of their strategic path which they have taken for singapore market, just that the ACTUAL quality of the VALOUR brand product has to be of a "fair" quality/safety standard.
Now, let's see this particular singapore market strategy,
1) Just by selling IT Major's products, Challenger is always at the "taking" end, ie, IT Major's sets the price and challenger takes it. Since got no "bargaining power" to negotiate anyway. (At the moment...since sg market too small...), this means D.O.G ratios of OEM/Distributor/Retailers % cut comes in. => Margins are stuck/ Or hard to increase!
"This can be very significant if you consider that brandowners can usually earn about 40-50% gross margins, distributors 10-15% and retailers 20-25%. At the net level it is about 5-10%, 2-3% and 4-6%." - D.O.G
2) Retail Cost = RENTALs and distribution cost => Increasing yr by yr.. => COST Increase!
So, to move up the value chain/create growth, identify the product segments which IT Majors are not in focusing yet, eg, accessories...etc..why? also because the OEM factories can produce these products for Challenger at low prices too!
So, the value of a Valore Product is basically, (in singapore's market context)
Total Value of Valore Product = 1) Brand/reputation of Challenger cost + 2) Convenient Factor cost (no.s of stores) + 3) cost of actual OEM's product x 4) market ability to pay factor (%)
All these 4 factors plays a critical part, and of cos, IT Majors should also frown on this Valore move by Challenger if they feel that Challenger is "eating" into their pie..
Anyone can do a basic calculation on powerbanks? take a well known proven power bank by IT Major, and compare against Valore's powerbank, side by side / size by size.
This sounds a bit like Chinese's sports shoes makers (knock-offs/copies) comparing with NIKE's shoes... which fails in terms of quality and eventually pushes consumers to buy REAL NIKE shoes eventually.
For Valore to work in this market dominated by IT Majors, Quality of the products DOES matters!
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I was thinking, maybe Challenger could have taken the other path, expand into other markets. (ie, IKEA, hyundai, kia), this way, growth through quality IT major products are maintained.
I suspect they are facing a "challenge" in expansion overseas... maybe a M&A would need to be considered, maybe M&A with Giant/Sheng Shiong for ASEAN Market, M&A with OSIM for US markets..., M&A with Capitaland for China Markets... (duhs!, oem factories are in china!!)... M&A with Singapore Airlines/Singpost for other hard-to reach places..
Makes more sense to increase worldwide outreach and growth, selling quality IT products and building up a reputable brand at the same time!!!
Now, let's see this particular singapore market strategy,
1) Just by selling IT Major's products, Challenger is always at the "taking" end, ie, IT Major's sets the price and challenger takes it. Since got no "bargaining power" to negotiate anyway. (At the moment...since sg market too small...), this means D.O.G ratios of OEM/Distributor/Retailers % cut comes in. => Margins are stuck/ Or hard to increase!
"This can be very significant if you consider that brandowners can usually earn about 40-50% gross margins, distributors 10-15% and retailers 20-25%. At the net level it is about 5-10%, 2-3% and 4-6%." - D.O.G
2) Retail Cost = RENTALs and distribution cost => Increasing yr by yr.. => COST Increase!
So, to move up the value chain/create growth, identify the product segments which IT Majors are not in focusing yet, eg, accessories...etc..why? also because the OEM factories can produce these products for Challenger at low prices too!
So, the value of a Valore Product is basically, (in singapore's market context)
Total Value of Valore Product = 1) Brand/reputation of Challenger cost + 2) Convenient Factor cost (no.s of stores) + 3) cost of actual OEM's product x 4) market ability to pay factor (%)
All these 4 factors plays a critical part, and of cos, IT Majors should also frown on this Valore move by Challenger if they feel that Challenger is "eating" into their pie..
Anyone can do a basic calculation on powerbanks? take a well known proven power bank by IT Major, and compare against Valore's powerbank, side by side / size by size.
This sounds a bit like Chinese's sports shoes makers (knock-offs/copies) comparing with NIKE's shoes... which fails in terms of quality and eventually pushes consumers to buy REAL NIKE shoes eventually.
For Valore to work in this market dominated by IT Majors, Quality of the products DOES matters!
-----------------------------------
I was thinking, maybe Challenger could have taken the other path, expand into other markets. (ie, IKEA, hyundai, kia), this way, growth through quality IT major products are maintained.
I suspect they are facing a "challenge" in expansion overseas... maybe a M&A would need to be considered, maybe M&A with Giant/Sheng Shiong for ASEAN Market, M&A with OSIM for US markets..., M&A with Capitaland for China Markets... (duhs!, oem factories are in china!!)... M&A with Singapore Airlines/Singpost for other hard-to reach places..
Makes more sense to increase worldwide outreach and growth, selling quality IT products and building up a reputable brand at the same time!!!
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
