Question

BUSINESS STRATEGY ll

Case Study Write-Up #1 is based on the “Skullcandy” case found in Strategic Management textbook (pp. C84). Read the case thoroughly and then respond to the questions found below. Use the models, theories, and concepts discussed up to this point in the course to help analyze and provide a complete understanding of how this industry and the companies in them have interacted over time. Each answer can be presented in narrative form or bullet form, depending on which style makes for a more efficient and effective response to the question.

Questions to respond to in writing:

1. Was the headphone an attractive industry when Alden entered with Skullcandy?

2. Does Skullcandy have a sustainable competitive advantage in the market? If so, what is it and why is it sustainable?

3. How are Skullcandy’s products positioned? How is this positioning supported (or unsupported) by the company’s functional-level strategies?

4. What are some of the features of Skullcandy’s product development strategy? Do you have any recommendations for how it is managed?

Answer 1

Answer (1) : The Headphone and earphone industry have been on boom in the last decade. With technology taking over the human actions and daily life behavior, headphones have become very dear to an individual, as it makes him feel his privacy even in the mix of many. The headphone industry has been one of the fastest developing industries worldwide. By the time Alden entered the Headphone and earphone industry in 2016 with the brand name ‘Skullcandy’, the headphone and earphone industry were already a full-fledged and attractive industry.

Answer (2) : The Headphone and earphone industry is now flooded with many small medium and large scale industries with products of various graded and quality in the market. Skullcandy specializes in the manufacture of headphones and earphones and has a variety of very attractive and good quality products, however, it does not enjoy any sustainable competitive advantage in the market. The market of headphones and earphones have pretty big players with extremely sophisticated and advance headphones and earphones in the market. Therefore, Skullcandy does not have any competitive advantage in the market. Its survival in the market would depend on its ability to produce cheapest headphones with best qualities.

Answer (3) : Skullcandy products are currently very well placed in the market. The current financial reports of Skullcandy shows that it has had a very good run in the market in the late few years. The Product sales of the company has been showing an increasing trend in the last many quarters and they now enjoy a very good reputation in the market and carry a brand value.

                                  The company’s functional-level strategies support the current market of Skullcandy in a very positive manner. The market strategies of Skullcandy has been very successful lately. In one of the recent incidents, skull candy had lately decided to give out huge number of discounted products to its consumers at very minimal prices, and when the balance sheet was calculated, it showed that the overall demand from the consumer side during that period had actually increased by a good proportion.

Answer (4) : Skullcandy’s products have the basic feature of being cheap and maintaining a very good quality in correlation to the price placed for the product. The company has persistently tried to enter the large scale business of premium products too, however, it has also tried to ensure that it can keep a minimum possible price for their product, so that its products do not get lost in the mix of premium products.

                                 The company needs to improve a lot on its after sales service. There has been much grievance from the customer side that the after sales service of Skullcandy has not been satisfactory. In this age of fast paced life and development, the firms which provide better overall satisfaction to the consumers has a better chance of survival. Therefore, Skullcandy needs to improve on its services. Moreover, Skullcandy should also look at the proper reach out of it products to the urban areas. In the urban areas, the people would not want to spend too much of money for headphones and earphones and therefor Skullcandy has a very good chance of a better growth in the urban economy.