Consulere

CASE STUDY
King Hardware, an Indonesian manufacturer of home appliances is our client. With a greater
than 60% market share, they dominate the Indonesian market. Additionally, they export their
goods internationally, but with only a 5% market share.
We have been hired to assist them in identifying opportunities to raise sales and earnings for
the business.
How can you assist them?
• The business divides its sales between the Indonesian market and overseas markets.
• There aren't many significant local rivals in the Indonesian market.
• The business can charge more because customers trust it and are familiar with it in
the area.
• There is only a 3% growth year over year in the worldwide appliance market.
• Japan and South Korea are the two largest emerging markets, increasing at 10% and
9%, respectively.
• However, the markets in developed countries like the U.S., UK, and other European
countries are contracting because of the items' enhanced longevity and the decline in
new sales.
• The Indonesian market is expanding at a 10% annual rate.
• Several foreign companies are competing for market share in Indonesia. Imported
goods from Japan, South Korea, and the United States are posing a challenge to the
client's position as a leader.
• The business's manufacturing facilities are running at full capacity.
• The production setup requires a lot of capital and is highly technological. Any
modification to the products would demand a large cost.
• The business operates its retail locations in Indonesia where it sells its goods.
• It has partnerships with sizable importers in significant geographic areas for its
international sales. It only conducts business with import partners and has minimal
influence on retail sales in international markets.
• The United States accounts for 70% of its export sales.
Overview of global sales (Local and International)

Total Units Sold Average Price ($) Unit Cost ($) Profit Margin (%)
Air Purifier 50000 45 36 20
Vacuum Cleaner 90000 20 10 50
Water Purifier 60000 125 100 20

Overview of Local Sales

Total Units Sold Average Price ($)

Air Purifier 15000 52
Vacuum Cleaner 81000 18
Water Purifier 42000 128

Overview of International Sales

Total Units Sold Average Price ($)

Air Purifier 35000 42
Vacuum Cleaner 9000 38
Water Purifier 18000 118