Challenges and Strategies of Alcas Corporation's Vector Marketing Corporation

Case Report: Challenges and Strategies of Alcas Corporation's

Vector Marketing Corporation

Introduction

In general observation, Alcas Corporation's performance has been doing well in the past years. The company's revenues had shown improvements, in which the revenues in 2001 increased by 37.5% from the year 2000, and by 2002, the increase was at around 20%. The recent figure at$253 million dollars has driven the leaders of Alcas Corporation to strategize based on the target that the corporate revenues would increase to at least $500 million annually in the next five years, which would eventually lead to an annual revenue of $1 billion.

Alcas Corporation is made up of a group of companies selling kitchen cutlery. These groups of companies are as follows: CUTCO Cutlery Corporation, Vector Marketing Corporation, CUTCO International and KA-BAR Knives. The company, which originally manufactures and sells and knives, would eventually acquire its own sales and marketing arm, in which everything is consolidated under Vector Marketing Corporation for its North American sales activities. Its other subsidiaries have similar business activities: CUTCO International concentrates on international market entry whereas KA-BAR Knives is another acquired company specializing on outdoor cutlery. Thus, Alcas Corporation's business is generally all about knives and cutlery, and to ensure the strength of its sales and marketing, the Vector Marketing Corporation oversees that the products are out in the market and high in demand.

Problems and Issues

Based on this information, the head figures of the company have set up the following issues before the marketing strategy would be finalized:

?Staffing of the field sales organization in order to power the growth of these areas.

?Gearing up in terms of facilities, equipment and manpower for the projected sales in 2004 and 2005.

?Identify the major growth driver of the second half of the decade to establish its foundation before implementation.

It should be noted too that Vector Marketing's approach in selling CUTCO products at a local level is through the direct marketing approach. The company has been successful with this approach for several years, especially its utilization of college students doing their part-time sales activities during the summer season. However, there are also a number of issues that Vector Marketing should also deal with, including the current profiles of the market, an assessment of the current system, the availability of the Internet, and another prospect at making a successful entry in international markets.

Analysis

It is expected of any company who has been doing well in the business to set higher targets. Since Alcas Corporation has been performing fairly well in the local market, along with its Canadian operations, the corporation has to strategize now on how it can further improve its revenues. The direct selling approach that Vector has been utilizing in the past years has been a success, however, since its target market and selling and marketing systems have been too traditional, it is time for the corporation to approach the strategy from a different perspective.

This is to say that the company is faced with the reality of the dynamism of the market and the available industries. For one, although the company has identified the typical Vector costumer, it is important to acknowledge that the company continues to face stiff competition from other brands that have been using the retail system in order to put their products out in the market. Another reality is that Vector's market so far has been too slim: married middle class citizens, educated and affluent. Although in statistics there are enough target homes that Vector can direct its attention to, the company also has to face competition from German brands and other local companies that sell in-stores. This is why in terms of strategy, Vector has capitalized on recruiting college students during the summer, and these students have become the company's assets in order to have their products to sell some more.

In a sense, there is no problem with the old system. In fact, this is a high motivating factor for college students to work for Vector during their summer breaks, and this marketing and sales scheme highly relies on the extensive network of its part-time sales representatives. The company's strategy to sell via catalogue, in addition to its regular sales representatives during the school months, would be a means to compensate for the "loss?of representation the company gets during the summer season. However, given that the company has to look for a way to increase its revenues by more than 100% in the next five years, this would call for Vector to diversify its strategies.

This is among the key challenges of the companies who have used the direct-selling channel in the past decades. There are a number of reasons why direct-selling has been a