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Question: RedPly (name changed) is a leading Indian plywood manufacturer. Along with plywood it also manufactures and markets allied products for furniture making including laminates, veneer, doors etc.
though Plywood remains its largest revenue contributor. RedPly prides itself w.r.t its product quality and remains committed to providing the highest quality to its consumers. Over the years it has installed latest machines and equipment for high-class manufacturing, though it leads to escalation in production cost. RedPly’s closest competitor is OrangePly (name changed), with unbranded players being the most significant competition. OrangePly competes through flexible retailer terms and smart marketing and communication strategy while unbranded players offer 30-40% lower price. Plywood retailers and carpenters are the key influencer to customer’s decision. While customers
(Home-owners) show a preference for RedPly, retailers try to convert them to brands offering higher retailer margins. Carpenters demand higher price for using branded plywood and assure home-owner about the quality of the ISI-marked products or unbranded products. Due to above factors RedPly is consistently losing market share and is facing price-pressures. Plywood market is dominated by the unbranded segment (~60%) with branded players (RedPly, OrangePly,
others) forming the remaining.
Critically analyze the RedPly’s market situation to identify its business challenges. What is/are the possible outcomes if RedPly does not respond to these challenges? Suggest the strategic options available to it. What are the pro and cons of each strategic option?
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