I. Market Situation Analysis:
Lancer galleries are in a really sole concern. Although their figure of rivals has increased over the past few old ages. the figure of rivals is comparatively few. This is an advantage. Disadvantages are far more. For one. reproduction and shams are going a job in the market. This poses a menace to Lancer. as many people are merely buying artefacts for gifts and cosmetic points. non caring about the historic value. and would instead pay a cheaper monetary value for practical intents. Second. obtaining artefacts from over seas has proven harder over the past several old ages because of political state of affairss and other grounds that bound supply. This makes true artefacts harder to acquire. hence more expensive. Last. because of the recession and economic issues. purchasing African and South American artefacts is non as common.
II. Key Problem
Lancer Galleries must make up one’s mind whether it will be a smart determination. but ethically and financially. to take the trade that was offered to them by a mass ware section shop. The contract presents the chance to add $ 4 million in extra gross revenues yearly. nevertheless they would hold to treble the sum of reproduction they sell. They are torn by the chance to do more money. but the possible to finally degrade the value of their concern by selling shams.
III. Analysis of Options/Alternative Schemes
Lancer Galleries has two options. They can either take the trade proposed by the section shop. or they can worsen and go on to carry on concern as they ever have. If they accept the proposal they have the chance to increase gross revenues by 4 million yearly ( depending on consumer credence ) . The company would purchase merchandise at 10 % below the company’s bing monetary values and its initial purchase would non be any less than $ 750. 000. However. in order to carry through this. Lancer Galleries would hold to treble the sum of reproduction they sell in order to hold adequate ware to sell. By increasing the reproduction gross revenues. Lancer would be redefining the concern. as they have ever prided themselves on happening the most pristine and legitimate artefacts available. Lancer faces the quandary of more money. versus giving concern values.
I recommend that Lancer does non accept the contract that was proposed. Right now their one advantage is that they don’t have many rivals. This is because they merely sell legitimate artefacts and people trust that when they buy from them. they are acquiring a solid merchandise. While upfront it may look that they would be doing more money. I believe that overall they would be degrading their concern by trebling the sum of reproduction sold.