Breezy Air Filters
The company, Breezy Air Filters, has exuded a dominant position in the sale of carburetors and air filters within the North American market. Due to its efficacy in delivering the best products at the appropriate time, the company has been able to stay ahead of its competitors and simultaneously, maintain considerable financial performance. Nonetheless, certain factors are uncontrollable and therefore, affect the business significantly. In this respect, these factors are mainly based on the external environment in which the organization operates. One of the main facets affecting business for the company is the increase in crude oil prices. Due to this occurrence, the volume of sales for automobiles has decreased. This has posed a negative effect on Breezy’s profit margins. Plans are underway to ensure that the most effective strategies are implemented in order to ensure success for the company. In this case, the best possible strategy would be to develop new products for the fuel-effective cars of the future.
In order to provide new products to the North American market, it is imperative for the company to consider outsourcing some of its processes. One of the tactics that Breezy can consider in order to retain its dominance involves venturing into new markets by providing new products other than the air filters and the carburetors that it has mainly focused on in North America. The tactic is profitable because the market is saturated and may, therefore, impinge any form of healthy competition for the company. However, there is a demerit associated with the respective form of strategy. Accordingly, the company stands to incur significant expenses if it considers participating in the process using its own resources. Therefore, as a way to restrict it from utilizing many of its financial resources, outsourcing certain processes to other firms may be effective in lessening a deteriorating effect.
Usually, when organizations engage in outsourcing, they focus on paying for products and services that will originate from the external providers. In this respect, one of the processes that Breezy will outsource is research and development (R&D). For the time it has dominated the North American market, Breezy has focused considerable resources into studying and developing carburetors and air filters that are ahead of the competition. Hence, for the organization to initiate R&D on the design of futuristic automobiles, it will have to compromise the amount of resources it injects into their dominant products. However, at this point, it is already difficult for the company to maintain sizeable profit margins based on the impact that increased crude prices have imposed on sales.
In addition to the use of outsourcing, Breezy can also focus on forming strategic alliance with existing automobile manufacturers. Doing this can assist the organization in using effective means of supplying their products to new markets such as distribution channels. Aside from this, the organization can also cut the costs involved in R&D by splitting it with the partner company involved. The drawback from this strategy is due to the sharing of profits, which will take place once the company gains from the project. In addition, by working with existing partners, Breezy can continue extending its products beyond the main ones it provides within its market. Consequently, the company can do this by working together with its current partners in order to engage in novel product development for prospective fuel-effective automobiles.
In conclusion, the development of new products for its respective market would be an effective strategy for Breezy Air Filters. Since the organization already maintains a domineering presence in the North American market, it would not be difficult for it to provide commodities that will quickly catch on throughout this particular sector. Additionally, by integrating the process of outsourcing and the formation of strategic alliances, Breezy can limit the costs involved in penetrating a new market by sharing its expenses with its current partners. Lastly, the company can also exploit R&D in designing new products by outsourcing the processes from other organizations, which may offer it at reasonable expenses.
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