Ian Crawford
Steve Ford
Sufian Doleh

Fenix del Sur, LLC

Recommendation:

Fenix del Sur, LLC should not enter into the contract with the Department store. Although the contract presents the opportunity to increase sales by $4 million, the long-term effects on the company can prove to be disastrous.

By increasing the amount of replicas sold by the company, it will be changing its image and reputation. Fenix has an image and national reputation of carrying authentic artifacts and not saturating the marking with replicas, as compared to their competitors. This move could cause current dealers and customers who deal in only authentic pieces to lose respect and confidence in the company, thereby causing them to cease transactions with Fenix.

Furthermore, the market does not seem to be moving into the direction of predominance of replicas. Authentic artifacts remain the most highly sought products in this industry. Moreover, Fenix is still dominant in the industry. They have a gross margin of $25 million and have had a constant increase of sales of 20% annually for the past decade. Fenix del Sur, LLC should not enter into the contract with the department store because it is very likely that the negative impacts will outweigh any potential gain for the company.

Implementation:

The company should keep doing what it is doing with the product line and should also increase company awareness with consumers. Fenix can do this by using new methods of marketing such as the Internet. The company can extend its method of sales to the internet. The company can develop a website and sell online in addition to its current methods. Some of Fenix’s competitors use the internet for sales and this may be an advantage they have over Fenix.

The advantages of this are cutting out the middleman, decrease the manpower required to assist buyers, better buyer experiences