YANKEE CANDLE External Factors Evaluation Other firms in the - - PowerPoint PPT Presentation

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YANKEE CANDLE External Factors Evaluation Other firms in the - - PowerPoint PPT Presentation

Jul 30, 2023 122 likes •332 views

YANKEE CANDLE External Factors Evaluation Other firms in the industry captivate a variety of market segments by diversifying their product line Because Yankee Candle has not diversified their product line, the company lacks the

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YANKEE CANDLE

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External Factors Evaluation

  • Other firms in the industry captivate a variety of market segments by diversifying

their product line

  • Because Yankee Candle has not diversified their product line, the company lacks the

ability to attract more than one segment of the available market

  • Consumers purchase products from companies that are fresh and innovative
  • Companies that are aware of the consumer’s desire are able to capitalize on
  • pportunities that Yankee Candle is missing out on by not acknowledging the needs
  • f consumers
  • Competitors have also taken advantage of consumers increasing use of the Internet
  • Yankee Candle must recognize the Internet as a growing market and find ways to

restructure their business model to accommodate this ever-expanding market

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External Factors Evaluation

2.2 1.00 Total Score Competitors have stronger market presence 0.9 3 0.3 Companies that are more aware of contemporary market and capitalize on

  • pportunities

Website is boring and lackluster 0.2 1 0.2 Redesigning website to appeal to online shoppers Company needs to be aware as consumers desire “green” products 0.2 4 0.05 Discovering natural and sustainable materials will make a firm appear more socially responsible Company needs to extend market, target younger demographic 0.2 1 0.2 There is a strong desire for a more youthful and contemporary feel in choice of products Average price $20; reasonably priced for candle and container 0.4 4 0.1 Inability to raise prices since product line is somewhat uniform Products appeal to an

  • lder market

0.3 2 0.15 Other firms captivate a variety of market segments by diversifying product lines

Comments Weighted Score Rating Weight External Factors

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Internal Factors Evaluation

  • Strong and effective management
  • Dominant market share in the premium candle industry
  • Indisputable experience
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Internal Factors Evaluation

Contributed over $150,000 over the last 2 years to help address the #1 killer of women in the US 0.06 3 0.02 Annual “Light a Candle for Your Heart” program to support the American Heart Association 0.15 3 0.05 Generated free cash flow of $110 to $120 million 0.15 3 0.05 Company is creating other candle companies to sell through mass premium channels, such as Costco and Kohl’s 0.40 4 0.10 35+ year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts 3.38 1.00 Total Score One of Yankee’s main wax providers put them on 70% allocation after suffering damages from Hurricane Katrina 0.3 2 0.15 Given the high cost of oil and the strained refining capacity, the cost of raw wax has skyrocketed 0.20 4 0.05 By utilizing borrowed funds, repurchased $185 million worth of its stock 0.15 3 0.05 Earned $80 million in cash 0.40 4 0.10 Market capitalization of $850 million 0.40 4 0.10 Leading designer, manufacturer, wholesaler, and retailer of premium scented candles in the giftware industry 0.45 3 0.15 Business has around 50% of market share in the premium candle segment 0.12 4 0.03 Company provides financial incentives to management employees who have significant responsibility for sales, operations, and profit 0.60 4 0.15 Management is intelligent and disciplined Comments Weighted Score Rating Weight Internal Factors
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IE Matrix

High (3-4) Medium (2-2.99) Low (1-1.99) High (3-4) Medium (2-2.99) Low (1-1.99)

IFE Scores EFE Scores

Yankee Candle

1: Invest/Grow 2: Selective investment/Maintain position 3: Harvest/divest
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  • Approximately 70% of Yankee Candle’s customers are 35 or older.
  • Our consulting firm encourages Yankee Candle to expand the market and capture

young adults and recommends three strategies to achieve this goal: (1) Market development strategy, (2) Product development strategy, and (3) Market penetration strategy.

Corporate Strategies

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  • Most effective strategy to capture Yankee Candle’s younger market:

Launching a national campaign, utilizing print media, as well as the Internet

  • Current Yankee Candle ads appear in local print media, such as newspapers
  • New advertisements will have less text and a more simple and modern look
  • Lifestyle magazines, like Real Simple or Martha Stewart Living
  • Internet banner advertisements

Market Development Strategy

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Market Development Strategy

Current Ad: New Internet Ad:

Yankee Candle

a passion for fragrance

come see

what’s new

www.yankeecandle.com Too much text Difficult to read Old and outdated Simple Eye-catching Mysterious
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  • Create a new line of candles that appeals to the younger market
  • Sleek and monochromatic look, so that they can easily blend into a variety of

environments

  • Still recognizable as a Yankee Candle product
  • Be careful not to abandon current customer

Product Development Strategy

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Product Development Strategy

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  • Increase product usage for all of Yankee Candle’s customers
  • Provide incentives for both the new and younger consumer, as well as their loyal

customer base

  • We suggest that the company offers a Yankee Candle Club card
  • Tracks purchases and offers rewards based on the customer’s purchase history
  • Show how their product could adapt to many different environments and uses
  • Candles are the perfect gifts!

Market Penetration Strategy

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Market Penetration Strategy

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SWOT Matrix

Strengths Weaknesses Opportunities Threats

Use internal strengths to take advantage of external opportunities Improve internal weaknesses by taking advantage of external opportunities Use internal strengths to avoid or reduce the impact of external threats Develop defensive tactics aimed at reducing internal weaknesses and avoiding external threats Yankee Candle has a strong market presence. They have the opportunity to extend their base to a new market, younger consumers (age 18-35). The company has a dated image and has been unsuccessful in marketing to consumers By extending their market, Yankee Candle has the opportunity to update their image and pursue an effective marketing campaign. Be certain not to abandon loyal customers while expanding market. Continue to offer customers the superior product quality and service they have always received. Yankee Candle needs to remind consumers
  • f the novelty of candles, that substitute
products simply cannot imitate.
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SPACE Matrix

Aggressive Conservative Defensive Competitive +1 +2 +3 +4 +5 +6
  • 6
  • 5
  • 4
  • 3
  • 2
  • 1
+1 +2 +3 +4 +5 +6
  • 6
  • 5
  • 4
  • 3
  • 2
  • 1
CA IS FS ES CA: -1.8 IS: 4.2 X-Axis: 2.4 FS: 5.0 ES: -1.4 Y-Axis: 3.6 Cost leadership through concentration, concentric diversification, or vertical integration
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BCG Matrix

Division 1: Retail Sales Division 2: Internet Sales Division 3: Marketing and promotion Division 4: Returning Treasures (candles) Division 5: Seasonal Favorites (candles) Division 6: Scentstories Division 7: Custom Candles Division 8: Tarts Wax Potpourri Division 9: Samplers Votive Division 10: Miscellaneous Products Market Growth Rate Relative Market Share +0.2
  • 0.2
0.5 1.0 0.0

1

2

4 5

3

6 7

8 9 10

Stars Question Marks Dogs Cash Cows

Cash Flows
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Grand Strategy Matrix

Key Internal Factors Weight Market Development Product Development Market Penetration

Strengths

AS TAS AS TAS AS TAS

Strong and effective management 0.15
  • 1
0.15 1 0.15 Dominant market share in industry 0.15 4 0.60 2 0.30 3 0.45 Indisputable experience 0.10 2 0.20
  • 1
0.10 Market capitalization of $850 million 0.10
  • 2
0.20 1 0.10

Weaknesses

The cost of raw wax has sky-rocketed 0.15
  • 3
0.45
  • Limited product offering
0.20 2 0.40 5 1.00 3 0.60 Ineffective marketing and promotion 0.15 3 0.45 3 0.45 4 0.60

Subtotal 1.65 2.45 2.00

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Grand Strategy Matrix

Key External Factors Weight Market Development Product Development Market Penetration

Opportunities

AS TAS AS TAS AS TAS

Consumers’ strong desire for more youthful and modern products 0.20 2 0.40 5 1.00 2 0.40 Redesign website that appeals to customers; fresh and easy to use 0.20 2 0.40 2 0.40 3 0.60 Become more socially responsible, ie: use sustainable materials 0.05
  • 2
0.10
  • Threats
Companies already capitalizing on younger market segment 0.30 4 1.20 4 1.20 3 0.90 Companies captivating a variety of markets by diversifying products 0.15 3 0.45 5 0.75 2 0.30 Inability to raise price due to uniform product line 0.10
  • 1
0.10
  • Subtotal

2.45 3.55 2.20

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Grand Strategy Matrix

Key Factors Market Development Product Development Market Penetration

TAS TAS TAS Internal Factors 1.65 2.45 2.00 External Factors 2.45 3.55 2.55 Total 4.10 6.00 4.55

Priority: Product Development

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"If we know where we are and how we got there, we might see where we are trending – and if the outcomes which lie naturally in our course are unacceptable, to make timely change."

Abraham Lincoln