Toucon Collections, Inc. free essay sample

This was a reaction to the growing demand of replicas, specially by gift buyers and people looking for decorative items. The overall market for artifacts and replicas has grown over the last decade. We will write a custom essay sample on Toucon Collections, Inc. or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page At the same time many new competitors have entered the market. Because of that Toucan faces supply problems and decreasing gross margins. How would one define Toucans business? Toucan operates in a very particular market in which reliability is a key factor to success. Its main business is still the import of original artifacts.Therefore, Toucan has chosen a few exclusive distribution channels (specialist dealers, firm-sponsored honing, exclusive department store), so it can control the quality of its products in order to maintain its reliability. The business has been around for about 100 years which also helped to establish a national reputation as one of the most respected importers of artifacts. Toucans annual sales average about 25 million USED and have constantly been growing at a rate of 20% over the last decade. How would the mass merchandisers offer affect Toucans business definition?The offer of the mass-merchandise department store includes a mandatory raise of replicas. This increase will have an impact on Toucans business definition. So far, Toucan has focused on selling unique products to a relatively small group of customers. If it accepted the offer, the business definition would shift towards becoming a mass producer of replicas. As a result, Toucan might lose its reputation as a reliable Importer of authentic artifacts, which could have a negative Impact on the Orlando business.Toucans main competencies are experience and reliability. Toucan has gained lots of experience in the artifact business during the last century. Through Toucans careful reification of the authenticity of the artifacts, its customers can rely on the quality of the products. Furthermore, Toucan has established long-lasting relationships with many of its buyers in Africa and South America and distributors in the US. This also ensures a high quality standard of the products resulting in a nationwide reputation as one of the most respected importers of artifacts.What is the apparent relationship between Toucan and its distributors and how might that contract affect it? The relationship between Toucan and its distributors is mainly based on mutual trust ND reliability. The highly limited distribution channels make it possible to control the authenticity of the artifacts in order to maintain a high standard of quality. There is only a limited number of distributors and for many of those Toucan is the only supplier.The distributors benefit from this business relation, because whenever people want to buy Toucans artifacts or replicas, they have to go to one of the limited specialty dealers. By accepting the contract Toucan would be able to reach a greater numb er of customers through all the branches of the mass-merchandise department tore chain. At the same time, Toucans original distributors would lose their unique status. Therefore, their relationship would deteriorate. Under what conditions should Toucan accept the offer?Accepting the contract would add $4 million to the annual sales of Toucan. Considering the present total sales of $25 million this addition resembles a great chance to improve the business. Without accepting the contract it might be more difficult for Toucan to grow as a company in the future due to the increasing competition in this specific market. We suggest following conditions that would make Toucan would have to change its production portfolio if it accepted the contract which usually includes high expenses.A long term contract would ensure stable sales numbers and prices. Secondly Toucan has to make sure that it separates the replica business from the original artifacts business. Whenever replicas are sold in the department store they have to be specifically labeled as replicas. This will ensure the unique status of the present distributors and Toucans reputation as a reliable dealer of authentic artifacts. Without the separation the company will lose some of its present customers.