Question 1) ??? Fortis has been facing strong competition: Since 2002, Fortis has been losing nearly 2% per year of the steel strapping market (in 2002 50% and 2008 40%). ??? Furthermore Fortis is confronted with significant erosion of prices: Other competitors initiated price war and Fortis refused to continuously cut its price. This also led to the fact that Fortis loosed market share to its competitors. ??? These effects are coupled with the overall declining health of the industrial economy and the fact that Fortis as well as ts competitors are closely tied to this. Overall decline of market / demand) and the increasing price sensitive of customers. ??? Strong international player filling the needs of the booming industrial economy abroad leading to fact that Fortis is not yet ranked under the world TOP 10. Question 2) ??? Overall declining industrial economy in U. S lead to a decrease in demand and to high cost pressure within the industry. Given that, Fortis’s customers are becoming ore and more price sensitive and less willing to pay premium prices.
Additionally, the continuously increasing steel prices leading to higher production costs and impacting product’s margin. Other players initiated price war (price differential of 5 to 10 % of Fortis discounted prices) while Fortis refused to continuously cut its prices, which caused Fortis to lose market share to its competitors. Increasing price sensitiveness of Fortis customers, decreasing market share coupled with low roduction utilization (70%) is increasing more and more pressure on Fortis to lower prices.
In addition to its standard “4-8-14” discount, Fortis can apply price-flex strategy in order to selectively meet lower competitor prices. Question 3) Fortis marketing strategy focuses on value-added service to customers. Unlike Fortis major competitors, it is not using price weapons but provides specialized service and equipment to meet unique customer needs. In contrast to the majority of the…
