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WIKO enterprise: The way to united states

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florian scopano

on 27 January 2014

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Transcript of WIKO enterprise: The way to united states

History :

French company located in "Marseille"
Created in 2011
A Partnership between a young French company leader and "the Tinno group".
Goal : "create a very friendly world brand "
Meet consumer expectations
Success story at the moment in France
Activity sector: Mobile phone

WIKO's statistics:
SAS
Initial investment: 100000€
Founders : M. Laurent DAHAN, a specialist in the distribution and logistics.
Turnover: 60 employees.
Partners: Tinno's group.
Tinno's production units location : "China"

Composition of the organization:

Purchasing.
Research and development.
Sales department (export) and communicating.
After sales service.
Management and administration.
WIKO's values:
Link: Working with consumers
Proximity: A good After Sales Service . Customer intimacy and trust with the consumer (social networks)
Choice: Being able to offer the best cell phone with plenty choice (design, colorful, fluid, inventive, creative)
Efficiency: Technology "plus" at the lowest price.
Type of management: Participatory "human adventure"

www.wiko.com
WIKO's strategy
1. Economies of scale.
2. Attractive price.
3. Reduction of trade margins.

"We have chosen to limit our investments in communication in order to provide the most advanced features at an affordable price."

Long term goal:

- New market : Europe (already in italie, Spain, Germany).
Short term goal

- Reach two million mobile phone in 2013.
- Obtain market share in Algeria.
The distribution channels
Internet:
(Amazon, Materiel.net, LDLC, Cdiscount, Darty, Fnac, Rue du Commerce, Top Achat, Gros Bill...)

Hypermarket:
(Darty, fnac, carrefour, auchan , boulanger, cora ...)
Wiko a French home succes:

Big success in France with his 3 product ranges.

Wiko moves to France just behind Samsung and Apple, with 10.5% of smartphones sold naked between January and September 2013.

The brand has captured nearly a third of the market (32.4%) out pack operator between January and May 2013 (just behind apple, samsung).

"Product export potential"
Factors key success in USA market:

1. Easy to use
2. The range and performance of the cell-phone
3. Brand image (buyers seeking a recognized manufacturer)

source: strategy analytics

US market :
Strenghts / Weaknesses
Global information about this Market
Strenghts
- 25% of PC owners do not replace.
- Emergence of prepaid cards (increased sales of cell mobile naked)
- Economic crisis.
- Not a lot of competitors in cell phone middle range
-Five-times more potential customer
Weaknesses
Company export readiness
International experiences

Wiko works in EUROPE and have 80% customers satisfaction
Languages : English
Networks: Facebook, Twitter, Viadeo, Linkedin, google+, Pinterest


GOAL
Long term / short term on the US market
Short term
1/2 years
- 5 % android market share.

- 2 million sales in one year (android).
Long term
3/5 years
- 9 millions sales in three years.

- 15% market share ( android).

- Develop the market in Europe.
Management and personnel

American management is not consultative or participatory but results-based
wiko's management is more participatory.


Production and financial capacity

Production: Made by tinno's group wich have enought capacity production
(no information about them on internet)

" We set specifications with very specific characteristics that we send to tinno group. Their teams submit proposals to us that we accept or not. The goal is to have the strike force of a large manufacturer, but features to the French Market"

Financial capacity: Wiko don't have published their account on internet


Estimate profitability
Units per year
Units: 2M in one year
Cell phone average price: 200€ = 270$
Type of exportaton: by sea
Cross margin: 25%
Others expenses
Hired 10 staff : 480.000€
Margin of error: 250.000€
Exportation price by sea
Exportation enterprise: CMA-CGM
40ft containers.
2M products = 100 containers
1 containers : 7000 €
Exportation: 700.000 €
Benefits
Turnover : 2m*200: 400M€
Cross Margin: (400M€*25)/100 :100M€

Return on investissment
Total : 100 M€ - (700.000+250000+480000) = 98.5 M€
In $ : 133,876,000
Export plan
General policy
Distribution channels:

Internet: Amazon, aliexpress, Bestbuy, Phone arena, Mobile store, cell phone shop.

Stores : WALMART, BESTBUY, BRANDSMART
Hypermarket: all the hypermaret who sell cell phone.
Context
- Range of product: Android.
- Price 95$ to 365$ because whe have to stay competitive against competitors

Operationnal suggestions
- Offer a 16GB SD card
- Offer a second SIM card
- Provide cover with logo of the Eiffel Tower.
- Create a teasing aroung the brand and talk about the french product
Cink Five
cink peax 2
Cink slim
Sublim
Iggy
Ozzy
Cink peax
Cink +
Market research
365$ 319$ 305$ 250$ 210$ 148$ 244$
169$ 95$ 142$ 122$
Method of market research
Survey by internet.

Previous study : Qualitative and quantitative studies ( commercial service...).

External : Governmental organizations, chamber of business, ministries, library, professional organizations, the press, private organizations.
Global information (import / export)
Export Usa / France :
Units
Value in thousands of U.S. dollars
Rapport

SH 85171 : sale of cell phone
2008 2009 2010 2011 2012

France 5 813 2 658 2 703 2 618 6 013
Sous-total 5 813 2 658 2 703 2 618 6 013
Autres 3 794 494/ 3 917 894/ 5 296 123/ 6 505 232/ 7 351 483/
Total : 3 800 306 /3 920 552 /5 298 825 /6 507 851 /7 357 495/
(Tous les Pays)

- Import prices and export declined in the United States since May 2013
- The US (+17,8%) of importations since march 2013

Global Information-Analysis of the target market


Other competitors (Huawei and Lenovo) have difficulty against apple and samsung on the U.S. market

U.S. buyers increasingly abandoning the iPhone in favor of Android smartphones.

According to consulting firm IDC, in mature markets like the United States, sales growth increased from 20.6% in 2012 to 4.6% in 2017 only.

Attention to the risk of trivializing a market for high-tech products.
Trends and demands

High tech market:
- Innovation
- Price
- Quality
- Brand awareness
- Brand culture
- Technological improvements in hardware (dual sim, 4g)
- Simplicity
- Autonomy
- People prefer Android than IOS.

US Purchasing power:

- Low with a decreasing trend since the crisis.

- One in ten jobs in the United States is now filled by an interim.

- According to a recent survey, less than a quarter of Americans have enough money in their savings account to cover at least six months of expenses, not enough to help cover a job loss, medical emergency or other unexpected event (according to the survey of 1,000 adults). 27% had no savings at all.

- One in four American workers has a job that pays $ 10 an hour or less.

- Only 24.6 percent of all jobs in the United States are called "good jobs". Source: Center for Economic and Policy Research


Competition


Main competitors on the market:

Samsung : 99$ to 579$
Apple: 450$ to 529$
HTC: 100$ to 750$
Sony : 95$ to 529$
Lenovo: 89$ to 590$
ZTE: 80$ to 550$
Huawei: 90$ to 480$
motorola: 125$ to 750$

Phone providers: Vodafone, verizon, et AT&T
If the goals are accomplished
External factors

Innovation in this market is really important because of the life cycle product.

The best distribution channels are: Internet, specialized stores and hypermarket.

The materials used must be of good quality and do not look cheap.

Specifications have to take into account the materials to use because this is a key factor of success on the U.S. market.

Foreign barriers

- Taxes related to the export barriers
- Authorizations for sale in usa
- Price must be competitive analysis difficult market
- The cultural dimensions to be taken into account.
Differences in cultural dimension
Less Power distance
Communication
-People are going to avoid physical contact more than FRANCE.

- Lot of respect during negociation.

- Management : socialise

- Accept the blame

- The communication with the customers or buyers are more indirect
Schedules of the actions
To conclude:
Less uncertainty Avoidance
Negotiation or communication
- Give new ideas
- The negociation and communication must be quick and realisable as soon as possible
- Let the buyers decide by their own.
- Gives de guidelines and nothing else
Strenghts
- Value for money.
- Design
- Double SIM
- Ergonomics practice and comfortable.
-Photos and video.
Weaknesses on the us market

- No 4G
- Autonomy
- Brand image
- Fiability
- Soudness
- soung quality
- Service after sales
Assessment product
source : http://www.verifico.fr/telephones_mobiles/avis/wiko
The strategy :

Low differentiation.
Price competitiveness (which is risky)
Identical product
Cost reduction
Pay attention to the communication and negotiation.
A difficult choice:
Feasibility
- Huge market with a lot of customers.

- Really good rentability if goals are reach.

- We have a competitive advantage
(Lower price, 2 sim, french product...)

- Export are less expensive.

- Different positioning (apple, samsung)

- Crisis

- Link with consumers

- long and wide product range with OS: Android

Take care of:
- Hypercompetitive market.

- China production

- Not enought innovation (4G, SD card, autonomy ...)

- Samsung and apple dominates the market

- Subsidiary company is more interesting

- Not the best market ( fairly mature market)

- Service after sales problem.

- Fiability

- More risky
Decision:

- Not the best solution actually.

- Market development in developing countries ( Algeria, Africa, ...)

- Test period: USA just internet sales ( amazon etc.)

- Test In a big city (Washington for example)
- Cycle of rapid obsolescence.
- Competitive Market
- Brand image is important for the American
- America is a mature market


275$
255$
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