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Case Study - Recovery Kitchens Ltd

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Introduction

Lara K. Business 11B 10th March 2008 Case Study - Recovery Kitchens Ltd What are the target markets of the business? The target markets of the business are people who want to buy a kitchen which is 'old' looking and suites the style of their house and people who are concerned about the environment, also known as environmentalists. Recovery Kitchens Ltd use recy.cled wood so therefore they appeal to the segment of their target markets who are worried about the environment. Due to the fact that the kitchens they produce are traditional so therefore look like aged kitchens they also attract those customers from their target market who want to buy an 'old' style kitchen. The company is also targeting a population which has a relatively high income, as the kitchens do not come cheap, due to reasons such as the cost of production. The target market of Recovery Kitchens is a differentiated market because kitchens are a very broad market however; kitchens using recycled and reclaimed wood are a niche market. Explain the internal and external factors that might affect the business. The internal factors that may affect Recovery Kitchens Ltd come from within the business itself. These could be positive or negative. Possible internal factors are: - Management of Resources - In some cases the wood may not be suitable to be prepared so then wood that has been bought by the company is wasted. ...read more.

Middle

They offered these kitchens at a cheaper price so therefore became rivals with Recovery Kitchens Ltd. Due to the fact that Recovery Kitchens Ltd only offer one main product they can not take the risk of loosing sales which businesses producing more than one good might be able to do. Once competitors enter the market Recovery Kitchens Ltd has to think of a feasible solution in order to avoid going out of business. Consumers want to buy a kitchen utility made out of recycled or reclaimed wood because they are environmentalists or because they like the 'old' looking kitchen. Recovery Kitchens Ltd is only aiming their product at a tiny segment of the overall kitchen market so therefore there are a variety of other materials used to make kitchens that consumers could choose from. However, consumers that come to Recovery Kitchens Ltd are concerned about the environment or are interested in a particular style so therefore these consumers want their kitchen to be made out of recycled or reclaimed wood. There is an immense price difference between the price charged by Recovery Kitchens Ltd and competitors because a tremendous amount of work is involved in reclaiming old wood so therefore Recovery Kitchens Ltd have to charge a higher price. Comparing this price to competitors, they are able to make the price lower because they offer cheaper pine products which look similar to reclaimed wood. ...read more.

Conclusion

There may not be a significant difference between managed wood and recycled wood so therefore the members of staff may not have to be trained how to prepare it. Expertise The demand for managed wood may not be high because other kitchen manufacturers sell kitchens at a cheaper price using different materials instead of wood or cheaper pine products. The demand for managed wood should be high because many people are concerned about the environment so that would be a major factor when they want to buy a kitchen where all the utilities are made out of wood. Recovery Kitchens Ltd will still maintain their environmental image even though they are using a different kind of wood. Demand In conclusion, Recovery Kitchens should definitely consider moving to managed wood because they will maintain their environmental image however diversify their products which could increase their profit. In order to ensure that moving to managed wood is the correct way of expanding the business, a SWOT analysis should be conducted and all factors, both negative and positive, should be considered so that the decision that is made is thought about in depth. There are many positive and negative factors concerning the situation of whether Recovery Kitchens Ltd should move to managed wood or not however, the decision should be based on the factors stated in the table and after a SWOT analysis is conducted, the business would have a better idea of what strategy they should follow in order to expand. ...read more.

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