GreenLight Reshuffle – Case Study Assignments
1.Review the key background information for understanding the case: Whoare the competing companies, products in the market, what type ofdistribution channels exist, and what are the regulatory forces thatshape the market. (30%)
Greenlight reshuffle is a case study explaining efforts to phase outincandescent bulbs in France by a lighting company named Osram andits competitor Philips. France based company Osram was consideringpenetrating to the mass merchandisers channel with its own compactflourescent lamp product line but weighing on the additional costsand time this would take. Philips on the other hand, together withvarious private brands was already dominating the mass m channel asOsram struggled with expanding its sales. Though Osram had alwaysbeen the leader of DIY (Do it yourself) channel, it was losing itscompetitive advantage to Philips. Phillips was expanding aggressivelyincreasing its market volume share by 3.5 and its value share by 4.3while Osram lost 3.4 points and 13.2 points in value. The lightingproducts available in the market include compact fluorescent lamps,incandescent lamps, halogen lamps and light emitting diodes. Thedistribution channels of these products are classified as massmerchandiser channel and DIY. The M-channel includes supermarkets,hypermarkets and Carrefour while DIY sold durable DIY products andhome improvement goods. M-channel has been the main retail lightingchannel market while DIY was more open to new technology such as LEDlamps and CFL.
2.What are the key dilemmas for Osram? Can you differentiate betweenthe more strategic/important dilemmas and the more tactical/lessimportant ones? (30%)
Theshift in distribution strategy is an imperative dilemma for Osram asit is bound to affect the company’s sales. While Osram has alwaysbeen the leader of DIY channel with the sales accounted for 64.5% byvolume to 76.2% by retail value, its competitors like Philips andother private brands had an absolute dominance in the mass m-channel.Osram was having trouble in expanding its sales further through theM-channel. Competitive pressure was developing in the DIY Channel asPhilips and General Electric started developing their positioningstrategies in this channel. This meant that Osram would face anotherproblem in the DIY channel of losing its competitive advantage overPhilips.
Apartfrom dealing with Philips, Osram had to deal with other risingcompetitors like Megaman and xanlite. Megaman believed that havingattractive and esthetic products was important while xanlitespecialized in LED bulbs with high luminosity that were designed toreplace GLS. Osram would also have to deal with challengingcompetitors when expanding CFL product into the DIY channel.
3.What would you recommend the company to do with respect to thedifferent marketing (and related organizational) decisions it needsto make? (You can relate to the dilemmas you highlighted above) (40%)
Osramneeds to choose different marketing strategies carefully and wisely.This will help them market their products and place them at the topdespite competitors rising and increasing. With improvedorganizational skills, they can still remain a leading company in DIYfor example. Philips has managed to compete with Osram because theyare an aggressive company dealing with the latest and modernlighting. They have also made a brand name for their product andcustomers can easily identify with Philips lighting products. Osramshould market its products in diverse channels of advertisement andcreating a brand name through which customers will easily identifytheir products with. Osram can employ modern marketing strategiesthat appeal to more customers and promote their sales beyond thelimited market scenario. Following the manager of lighting retailchannel’s opinion, Osram should shake up the market scenariothrough thinking beyond the box. The move into the food channel forexample can strengthen Osram’s position in the end.
Upgradingtheir lighting products and selling the latest energy saving lampswill also improve their sales. Energy lighting products are on demandcurrently and will receive an open market. A reshuffle in thelighting products and phasing out incandescent bulbs in France willmake way for modern effective lighting products.