Issue Facing the Chatime Company - Essay Example

One issue facing the Chatime Company is in the product life cycle planning in which the product must go through some stages to enhance its marketability. The company’s head wants to open more branches to sell their tea in the Asian market. Introducing the brand in the new market will require a lot of market research and promotions to determine the likes of the new customers (Aladwani, 2001). The management is against the idea as they feel that it will be a difficult task to undertake since their market is composed of Chinese. The product life cycle stages are its development, introduction, growth, maturity, and decline. Products in the first three stages will require intensive market research to establish them in the market. The product also requires a lot of development and advertisement to enable the consumers to know that they exist in the market (Strategic Management, 2015). Focused leadership is very important in establishing a successful market for the product.

Decision-making in this company is an issue because Zhao and the other Franchise are not in agreement as to where to open the new outlet. There are other tea stores such as Gongcha, which will offer stiff competition to Chatime products. Bore they see any substantial benefits from the new outlet, the company will spend a lot of money and other resources to convince their new client that they are offering the best product. Another reason that makes the decision a problem is the competition that already exists in the beverage market, which will require strong leadership and creativity to enable them to capture as many customers as possible. The challenge is that all the leaders of the company do not support the idea although Zhao has the support of a few of them. The company will, therefore, need to focus on product differentiation and leadership to win the market. The product life cycle planning will cost the company many resources such as high cost, new employees, advertisers, and advertisement materials to help gain entry into the new market.

The model that can help in explaining the issue further is Porter’s five forces which analyze the industry in terms of competitiveness as explained by Porter (2008). The Chatime Company can use the model to know whether its tea will compete with the other tea products in the Asia-Australian markets. Will the company compete for customers in the beverage industry and sell its product? This model will help Zhao and his team to have a cost leadership strategy that will enable them to make good decisions that will not lead to losses and the collapse of the company. The other actor is a differentiation strategy that will make their tea preferable to other brands. They must also focus on low costs of advertisements and promotion to reduce their marginal costs in addition to offering lower prices and free samples for their product. Therefore, the company can adopt Porter's five forces, which will involve differentiation, cost leadership, focused differentiation, and focused leadership as their main strategies (Porter, 2008).

The Head of management in the Chatime Company, Zhao, has a lot of work to do to penetrate the tea market in the new outlet that he plans to launch. The lack of support from the rest of the management is a big dilemma since he has to convince them that his idea is viable. The company, therefore, faces planning and management issues as the leader tries to expand the company amid protests from the rest of the management.