The Challenge
Antonio Halcón, a living legend in the world of skating signed an agreement in 2011 to put his name to a Quest lite skateboard, scooter and trike product line, a very successful global product line. The sponsorship deal has proven to be very lucrative for the company, leading to a significant boost in sales. A number of spin-off products have been successfully introduced throughout the world featuring the celebrity. The products are in high demand and the company has witnessed a significant benefit from the positive association with the name. Management see this as a further step towards the company's goal to increase long-term sustainability of sales.
Halcón has been quite prominent in the media recently, advocating the importance of safety and the use of protective gear in the youth skating culture. He openly voices his concerns that young people are not considering safety issues enough. A major challenge that Quest International currently faces is that Halcón is considering withdrawing his name from worldwide product ranges unless an international range of protective gear is introduced. This move could in the short term have enormous negative impact on Quest International's associated sales. In the long-term there is fear that the sponsorship withdrawal could also damage the company's image, giving its competitors the edge.
The recent developments with Halcón have accelerated the firm's efforts to extend its product range to include protective gear for this product line. Senior management has responded by identifying a regional market in Malaysia where the company already has some experience of manufacturing apparel and protective gear on a low-scale for a few other less prominent product lines. The cost of production is relatively low compared to Europe, but the manufacturing environment is considered suitable for producing goods that meet high European safety and quality standards.
Although the focus is initially on production for the European market, the company has detected a potentially promising retail opportunity in South East Asia. Sales of its boards are growing rapidly in South East Asia where the company is gaining more brand recognition. The management hopes to take advantage of this market opportunity to attract sufficient interest for its goods to ensure long-term sustainable growth. Quest is on the lookout for retailers that are active in both Europe and Asia. Suppliers should have a good knowledge of European standards. The ability to support Quest International in then adapting the product for the home (South East Asian) market would be a distinct advantage.
The simulation game Quest 3C is based on this scenario. Participants collaborate in different teams. One team will work for Quest International and be in charge of creating the company's brand extension proposal. Another will work for Quest's supplier, Nifty. The last team is in charge of retail stores belonging to the well-known chain, Panther.
Each team has to devise a business proposal (be it for a new product development or a new retailing concept) to support the business partnership. The proposal should include measurable goals based on the company's primary business metrics, prioritisation of its key strategic imperatives, and alignment of capabilities across business units and functional areas. The proposal will be presented to the management board of each team's own company.
The task, in individual teams, is to propose the company's strategy together with an implementation plan. A business case should be prepared, showing the monetary and non-monetary effects of this decision for the next 5 years. Teams operate across countries and product fields, competing against other manufacturers, retailers and suppliers to try to ensure long-term sustainable growth and good margins.
Images in header: Clipdealer
