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CASE STUDY TITLE: NATASHA (B)

I. POINT OF VIEW: Executive Committee of Natasha

II. OBJECTIVE/S
• To be able to increase the number of Natasha dealers.
• To be able to maintain and sustain the company’s growth

despite not being new in the market.


• To be able formulate strategies in expanding the company.

III. PROBLEM/S
Should Natasha prioritize its expansion through putting up

branches in regional areas such as Rizal (Region IV), Cebu

(Region VII), Davao (Region XI), loilo (Region VI) and Dagupan

(Region I ) or should it expand in Metro Manila (NCR) first?

IV. AREAS OF CONSIDERATION

Natasha started as a retail shop (sells shoes, T-shirts, pants, wallets and bags) in 1994.

The company was selling well initially but sales plummeted because of the energy crisis and

“sawa” scare around the mall that Natasha decided to downsize its operations and venture in

wholesaling. Today, Natasha is a one of the successful Filipino networking companies engaged

in direct selling of its products. It has 500 employees who are guided by the following core

values: Customer Service, Discipline, Constant Improvement, Respect for Each Other and

Honesty.

Natasha has approximately 200,000 dealers, 80 % of which are deemed active. Dealers

and/ or members are given two options on to earn, Direct/ Personal Selling and Recruitment. In

direct selling, dealers can personally sell products with the use of the company catalouges and

purchase the products at a discount to sell them at a profit. In recruitment, dealers can earn a

commission on the sales of other dealers they have recruited.


V. TOWS MATRIX

THREATS OPPORTUNITIES
•High level of competition/ Increasing number •Retail location expansion
•Attract customers due to appealing way of
of competitors
•Majority of Natasha's competitors distribute payment (Installment Basis)
•Attract potential dealers due to its high dealer
their products to resellers such as department
discounts and incentives
stores, drugstores, or cosmetic stores •Tapping into new markets and product lines
•Customer preferences and demographics are
•Promoting self employment
constantly changing •Uses Catalogues and delivers the product to
•Fraudulent Dealers/ Scammers
•Emergence of fraud companies the customers which helps customers’ shop and

buy latest products in a convenient manner


•Adaptation to new technological advances

WEAKNESSES STRENGTHS
•Costly selling and product delivery •Agreeable credit terms
•Difficulty in payment collection •Affordable products
•Difficulty in reaching wider audience as •Convenience of shopping at home
•Availability of high quality products
potential customers due to lack of branches •High discounts on members and numerous
•Low market share compared to bigger brands
incentives
•Cash inflows can be unpredictable or may •Differentiated business model

become bad debt losses •High entrepreneurial drive of the owners and

dealers

•Availability of products even in most remote

areas

•Affordability of products because of low

overheads

•Better styles without sacrificing the quality of


materials

•Personal relationship with customers

•More effective marketing and sales effort

VI. ALTERNATIVE COURSES OF ACTION

1) The company will expand its operations in Metro Manila.

ADVANTAGES DISADVANTAGES

•Save the company from incurring additional •Possibility of no to little/ less market with the

fixed overhead expense increasing number of malls

•Will be cheaper to transport merchandise from

the central warehouse to the branches

•It is easier to monitor operations given their

proximity to the top managers

2) The company will expand its branches in provinces.

ADVANTAGES DISADVANTAGES

•Huge possibility of new market •Costly

•No to little number of competitors •Needs more overhead

•If the branch is near the warehouse, deliveries •Difficult operations’ monitoring

can be made everyday


VII. CONCLUSION
We therefore conclude that the alternative course action two is the best solution to the

problem, which is to expand operation in key provinces.

VIII. RECCOMMENDATION

Natasha should expand outside Metro Manila because of competitors penetrating the

metro already. The expansion would create new demands and tap the target market which would

increase sales and build strong personal brand should they expand. Instead of fighting against

competitors in a shrinking profit- center market, Natasha should focus on creating a new pool of

profit- center market by branching out to places not yet explored by its competitors.

The executive committee of Natasha should conduct a meeting to discuss the necessary

actions to be taken in putting up branches especially in the key provinces mentioned. They

should plan the estimated budget for putting up a branch and entail help from a professional if

necessary. Hiring an operations manager will greatly help in the establishment of the branches

since he can take charge of the planning and implementation of the expansion plan. It would be

ideal to gradually expand and choose among the regional areas where to put up a branch first

rather than simultaneously putting up the branches. The company should also acquire

advertisements regarding the expansion to encourage new members to sign up and formulate

new promos to attract clients.