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International Market:

The size of the African black sewing machine market, as per estimation, is around 75,000 units per month and the market is primarily a wholesale market in which the companies direct their marketing initiatives on dealers or wholesalers, rather than on end users. The data available suggests that Allyn stands as a dominant player in majority of the African Market in the black flat bed cast iron sewing machine range. The other foreign player which has their presence in the African market is the Chinese black sewing machines with the brand name Butterfly. The presence of Allyn is strong in the African market and other Asian markets because of the companys capability of managing a strong distribution network. Allyn Africa Middle East Limited acts as the marketing and distribution management arm of the company operating from Amman (Jordan), with two support offices in Cairo and Johannesburg. Also, the company follows a focussed marketing strategy given the fact that its wide product range in the Africa Middle East region which varies from one country to another covering a wide range of domestic, artisan and industrial sewing machine. Also, the company Allyn used to source the black sewing machines from China and earlier from India. The increased cost of sourcing the machines from China and Hong Kong, the terms of ordering minimum number of units and no supply from India, Allyn faced some supply constraints and thus Ace Corporation can take advantage of this developing marketing condition to enter the African market aggressively.

SWOT Analysis:
The case discusses SWOT for many companies present in the sewing industry. Since the case projects a contrast between Ace Corporation and Allyn, the SWOT for the companies are as follows: Strengths: Ace Corporation Organization and people Strong network across the length and breadth of the country Distribution set up Ability to launch of economy range Wide range Enjoys a cash cow position Allyn Excellent brand image Perceived better quality in many geographical areas mainly in South India

Weaknesses: Ace Corporation Inconsistent product quality Inconsistent supplies especially in industrial and semi zig-zag segment Stability and training of personnel Allyn Financially uncomfortable, was unable to extend credit facility Inconsistent supplies, was out of market for six months Attrition of key personnel Dealer base eroded

Threats for the Ace Corporation, the new emerging player in the market:

The earlier market leader Allyn was trying to come back in the market with a different model The market share of SSI players (Small Scale Industries) or the local players was quite high and so the company was facing a stiff competition from them The governments policies on regional and free trade agreements could result in opening the market to more imports bringing unequal competition for the company, especially vs the Chinese players

Market opportunities for Ace Corporation:

The failure of Allyn resulted in a vacate space in the organized market and thus other players had an opportunity to capture this space Ace Corporation, with the failure of Allyn, had an opportunity to enter into newer markets, domestically as well as internationally. Also, this new perspective was well supported by Aces healthy growth in past years The rural market growth itself and the changing taste of the rural consumers was an opportunity for Ace Corporation The organized market was in a saturation and so Ace, for further growth could look into SSI market Given, the large market share of SSI and its unorganized structure, Ace Corporation could venture further into this unorganized segment The reduced price band between Ace and SSI products because of the new VAT structure, provided an opportunity to the company to persuade customers to buy Ace products which were far better in quality then the SSI products

Sales:
The exhibit given in the case shows that Ace corporation has registered an Year-on-Year growth over the past six years from 2000-01 to 2005-2006, given the overall product portfolio of the company

Issues:

The case basically talks about the issues faced by companies in the organized sector. These type of companies faces issues of high marketing expenses and the necessity of sustaining a differentiation in the product quality as opposed to the SSI companies. Strong companies such as Ace, Allyn can at most enjoy a cash cow status in the product-portfolio matrix. The future appears to be threatened. Other issues that Ace Corporation in particular faces is to increase the sales of sewing machines to 70,000 nos. Per month in the next two/ three years and also to formulate a strategy specific for this market situation taking into consideration Allyn Indias likely attempt to stage a strong comeback.