Tweeter

Exhaustive SWOT

Strengths

 Good business philosophy built on commitment to value and quality, by offering high-end audio and video components.

 Good business philosophy built on commitment to optimal customer service, encompassing a knowledgeable sales staff.

 Tweeter was the first and only company to launch an APP policy.

 Joining the PRO (Progressive Retailers Organization), Tweeter was able to obtain prices from manufacturers that were comparable with those obtained by its larger competitors.

 Growth in annual sales (from $35 million to $82 million) as well as expansion from 13 to 21 stores across New England and Rhode Island.

 More effective marketing mix (using TV and radio rather than print), conveying a message that Tweeter is competitive with their pricing.

 100-page seasonal Buyer's Guide with Tweeter product descriptions.

 High quality facilities (sound proof audio room for example), not prominent among competition.

 Tweeter offers a high-end line of products, as well as a standard line of products.

 The acquisition of Bryn Mawr and the capitalization of brand recognition within the new markets Bryn Mawr is found in.

 Every day fair pricing strategy, as well as the adoption of other policies other than the "sale" to communicate a price competitiveness.

Weaknesses

 The overall cost of operating the APP policy doubled in 1995.

 Tweeter attracts a specialized market, which does not attract a substantial portion of the market.

 APP detracts from Tweeter's i

 mage, since it would not need APP if it were essentially competitive like other specialty superstores.

 Tweeter is only a local chain of stores, in comparison to national chains such as Circuit City.

 APP is limited to the database entries it is based upon (newspaper-based), which may exclude other important methods of advertisement or un-advertised in-store sales.

 Bryn Mawr did not see significant impact on sales with the use of APP.

 Smaller floor space than its leading competitors (square feet).

 Higher prices for color televisions, which represent 24% of sales, in comparison to competition.

 RPP policy only covers the price difference at a rate of 100%, compared to 110 to 200%, which is offered by other chains.

 APP incurs large costs due to market research of the products.

 A small selection of lower end products.

 The human element that may cause errors in the price protection program.

Opportunities

 5.6% annual growth rate as well as 30% retail margins.

 Few people know (or even understand) what the APP policy is about.

 Approximately 50% of customers who want to purchase electronics will visit a specialty store or electronic superstore, rather than mass merchants, department stores or mail order houses.

 70% of Tweet's customers were quality/service customers (who represent 10% of the total market), so there is much room to expand into the remaining markets, which represent 90% of the consumer market.

 If price were not an issue, people would prefer going to Tweeter.

 With a population of 13.2 million, New England represents 5% of the U.S. consumer electronics market, which is quite substantial.

 Montgomery Ward's acquisition of Lechmere induced many consumers to believe that the level of customer service and salesperson knowledge would decrease appreciably under MW's control, thus opening a pool of customers that may be attracted to Tweeter's superior customer service.

 The introduction of new technologies in the audio/video component industry.

Threats

 The existence of a variety of electronic superstores creates a very competitive market.

 The opening of Nobody Beats the Wiz (3rd largest consumer electronics retailer in the U.S.), which is increasingly dominating the market with its prices (as well as 110% price protection)  a possible price war?

 4 out of 5 consumers who are familiar with Tweeter viewed it as being more expensive than other chains.

 8 out of 10 consumers check and delay purchase until they see newspaper advertisements.

 A lack of efficiency: 1 out of 3 consumers who come to Tweeter will obtain information from Tweeter, yet go on to purchase products elsewhere (Lechmere and Fretter).

 Cambridge Soundworks received positive reviews in a newspaper.

 Circuit City's entrance focused the consumer's attention on price as the primary determinant of product choice, through fierce price competition and media-blitz advertisement.

 Growth will be adversely affected since televisions sales will eventually plateau.

 Mixed reviews by the media concerning the virtues of the unique price guarantee Tweeter offers (APP).

Alternatives

The array of alternatives we've mentioned in the following section are brought about by two major issues that Tweeter must face: firstly, whether