Lancer Gallery has a respected reputation for selling and sourcing South American and African artifacts as well as their replicas. Similarly, the company sources and sells Native American jewelry and pottery to varied market collectors. The company’s gross sales were about $35 million dollars in the last years, and it has witnessed a 20% annual growth for the past decade.
Lancer Gallery Company has been given a deal by a mass-merchandise section chain store to buy and sell its products (Lancer Gallery). Lancer Gallery has to choose between accepting or rejecting the deal. The deal specified that that the chain store department will buy products at 10% less the corporation’s existing charges for as little as $750,000 (Lancer Gallery). If Lancer Gallery accepts the deal, it will automatically earn four million U.S. dollars yearly. Lancer Gallery’s objective is to enhance its revenue development that has decreased because of the effects of the recession (Lancer Gallery). The challenge facing Lancer Gallery is that if it agrees to sign the deal, it will be altering its purpose from a company that primarily produces authentic art to a corporation that mainly produces artifact replicas. In essence, Lancer Gallery wants to maintain its client’s base without losing some significant income streams.
Lancer Gallery can agree to sign the contract offered by the mass-retail department store.
Lancer Gallery can decline to sign the contract presented by the mass-retail department store.
Evaluation of alternatives
Accepting the Contract Alternative
Accepting the deal will assist Lancer Gallery to deal with rival companies that enormously source and sell replicas that are different from Lancer’s original and authentic artifacts. Even though Lancer Gallery will enhance the growth of its sales by about four million U.S. dollars every year, the production of many replicas can upset existing customers and dealers.
Rejecting the Contract Alternative
Rejecting the deal will help Lancer Gallery maintain its existing brand reputation, supply chain associations, and reliably growing revenue. Other companies can be contracted to take the place of Lancer Gallery, but it will have saved itself from producing replicas or changing its business model. Although Lancer Gallery is facing various challenges, it is evident that its sales are steadily increasing by about 20% every year. Declining to sign the contract will be a great thing because the production of replicas may taint its image or reputation regarding its strong buying abilities, robust distributor affiliations, and brand name acknowledgment.
Lancer Gallery should reject the deal offered by the mass-retail department store.
Lancer Gallery Company should increase its promotions and supplies of authentic artifacts.
The company should produce extra authentic products, as well as conduct research regarding the potential markets in other countries around the world, for example India.
Lancer gallery should create two distinct divisions in the company. The foremost division should concentrate on authentic artifacts while the second division should concentrate on replicas.
Lancer Gallery’s principal competencies are in the company’s ability to source and buy authentic products. By declining to sign the contract, the company will maintain a good reputation in the collectors market. As a result, it will promote its brand’s image. Accepting the deal will give inauthentic items an opportunity to corrupt Lancer Gallery’s image and name. Consequently, Lancer Gallery should focus more on the sourcing and selling of authentic artifacts to maintain its positions and reputation as the collectors market’s leader. If there are challenges in the African and Latin American markets, Lancer Gallery can expand its businesses to other regions such as Asia and Africa.
Lancer Gallery Business Brief. n.d.Web. February 2, 2016. https://generalistgemspotlight.wordpress.com/2015/06/18/case-study-bonanza-dos-lancer/