What are your recommendations over possible changes to Tefal’s strategy?

Question

What will be an ideal response?

Answer 1

The competition matrix framework suggests a degree of selectivity that is not compatible with low
cost/volume leadership in a global context. What does the enterprise want to achieve in future? Given the
rise of Chinese production capabilities, it would seem unwise to try to out-compete them directly or
indirectly in low cost terms. Thus selective segment differentiation remains probably the best strategy;
however, the details of how it is implemented in future may have to change. Tefal may need to redefine
its chosen segments and enhance its products, distribution channels etc. to meet the expectations of these
segments more closely. Meanwhile, control of production costs may still point to the need for Chinese-
based production, provided that quality is not compromised. This implies a joint venture rather than just
subcontracting. China of course is not the only low(er) cost source. Other location options include India,
Malaysia, Vietnam, Thailand, Philippines and Indonesia