lancer gallery case lancer gallery case lancer gallery case jose zeferino Lancer
ID: 389456 • Letter: L
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lancer gallery case lancer gallery case lancer gallery case jose zeferino Lancer WORD Saved to this PC eview View Help Tell me what you want to do Find BbC AaBbccEReplace Normal 1 No Spac. Heading 1 Heading 2 Select Styles Editing Paragraph Lancer Gallery is a limited liability company that sources and sells a wide variety of South American and African artifacts. It is also a major source of southwestern Indian-especially Hopi and Navajo-authentic jewelry and pottery. Although the firm's headquarters is located in Phoenix, Arizona, there are currently branch offices in Los Angeles, Miami, and Boston. Lancer Gallery originated as a trading post operation near Tucson, Arizona, in the early 1900s. Through a series of judicious decisions, the company established itself as one of the more reputable dealers in authentic southwestern jewelry and pottery. Over the years, Lancer gradually expanded its product line to include pre- Columbian artifacts from Peru and Venezuela (see Exhibit 1) and tribal and burial artifacts from Africa. Through its careful verification of the authenticity of these South American and African artifacts, Lancer developed a national reputation as one of the most respected sources of these types of artifacts In 2001, Lancer further expanded its product line to include items that were replicas of authentic artifacts. For example, African fertility gods and masks were made by craftspeople who took great pains to produce these items so that only the truly knowledgeable buyer-a collector-would know that they were rep licas. Lancer now has long-term contracts with native craftspeople in Central America, South America, Africa, and the southwestern United States wbo pro- duce these items. Replicas account for only a small portion of total Langer sales; the company agreed to enter this business only at the prodding of the firm's chi- ents, who desired an exparided line. The replicas have found most favor among gift buyers and individupls looking for decorative items The company's gross sales are about $35 million and have i tively constant rate of 20 percent per year over the last decade. Myron/ Ragard the firm's national sales manager, attributed the sales increase to the of the can and African artifacts: popularity of Sourh Ameri- company's product line and to the expanded distribution For some reason, our South American and certainly our African artlfagks have been gainins greater acceptance. Two of our department store custouiers fea- cured examples of our Atncan line in their Christmas catalogs last year I person- PrtScn Home End PgUp Dn F5 F6 F7 F8Explanation / Answer
The organisation in case sells authentic artifcats from South America and Africa and has established its reputation of being one of the trusted place to buy suvh items. Since the authentic artifcats are costly, the market for replica of these items is also developing and growing rapidly. The company also started to manufacture replica of original itmes, but to smaller extent. Now, as the competition has intensified and the similar type of items are sold at mass merchandise stores, the company is faced with an option to decide if it is ready to increase the share of replica in its total production, by threefold.
The biggest constraint in the sale of authentic artifact business is that it is a niche market, where only the true connoisseurs of art who are also capable to pay its price are company's customers. THis market is not going to grow at lightening speed at which the mass market is capable of. Other constraint is the supply of artifacts which is certainly limited, and company can expand at a restricted pace in future. Another issue is that the recession has slowed down the market, especially of expensive articles that can be postponed to a later occasion, though it is a temporary effect, but affecting the organisation's business.
The success measures are the sustainability of business not only in terms of financial viabiity and profitability but also maintaining an image indentity through ethical practices and winning and sustaining people's trust.
Company is faced with two alternatives. One, it can go ahead to grab the market opportunity that is not only available at the moment and capable of increasing the business of replicas by threefold, but also has a pormising future. Two, it can retain its brand identity of a seller of top class authentic artifacts which does not deal in replicas however lucrative the prospects are.
The first alternative seems lucrative at the first sight but it will seriously compromise its position as a genuine dealer that can be trusted with. As a maker of replicas, its hard earned reputation will be lost soon and its loyal customers will start looking for alternatives. Soon the company will find itself among the mass market fake producers that abound these days. Further, the fakes have no bottom limit to which they can descend, thus in future the company may be forced to compete with manufacturers of low grade fakes that sell for $2 and like, and be counted among those.
In my opinion, the company should stick to its business of genuine artifacts and consolidate it further without getting distracted by the replica business, which has not only low margins, but has also the potential to hamper its brand value seriously.
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