KingKing and Entrepreneurship in China - Assignment Example

KingKing is a successful candle manufacturer located in China. The US marketplace represents a tremendous opportunity for the company due to the fact that 50% of the $10 billion candle industry is generated in the United States. The company needs to find ways to better penetrate the US market. Three strategies that the company could use to increase its sales volumes in the US are: establishing a distribution center in the US, obtaining more contracts with major retailers such as Target, and the utilization of an e-commerce strategy.

A King-King distribution center in the US would allow the company access to thousands of small retailers around the US that sell candles. The only major retailer the firm has targeted is Wal-Mart. KingKing could increase its revenues if it expands its portfolio of major clients to include companies such as Target, Sears, and K-Mart. The third strategy the company can use to expand its US sales is to sell directly to the customers utilizing a web store. In 2010 the size of the US e-commerce marketplace was $153 billion (Plunkett Research). 2. The acquisition of a US manufacturer is a market entry strategy that could help KingKing penetrate the US marketplace.

In order to minimize cost the firm should target small to medium size candle manufacturer. In the United States there are over 1,600 candle manufacturers (Manta). Three potential acquisition targets are A&A Custom Illumntns Inc., Abby Candles Inc., and A&B Reminiscents. 3. Another way for the company to penetrate the US marketplace is by opening up its own stores in the United States. This solution is only viable if the company has sufficient variety of products to justify opening up a store.

The case study does not provide sufficient information to determine if the firm has sufficient variety of products. There are very few stores in the US dedicated only to selling candles. The solution of opening up a store might not be viable. Establishing partnership with stores could be a solution for the firm. Stores that sell cheap merchandise are the best targets for the firm. Places where candles are sold a lot are pharmacies. Entering into a partnership with a store such as Walgreens could be a profitable venture.

Another potential target for the store is supermarket chains. The firm could enter into a partnership with a supermarket chain such as Ralphs, Hilander, or Shop n Save. 4. Yankee Candle Store is one of the biggest candle manufacturers in the United States. The firm has a large selection of candles with over 150 fragrances. The company has nearly 500 company own retail stores and its products are sold across a network of 19,100 retailers (Yankeecandle). A big difference between KingKing and Yankee Candle store is that Yankee Candle store has been extremely effective at establishing a network of distributors across the US.

The firm targets both small and large retailers. Another difference between the stores is the product variety. Their great product variety has enabled the company to establish 500 company own retailing stores. A third difference between Yankee Candles and KingKing is the fact that Yankee Candles has a web store. Work Cited Page Manta.com. 2011. “1643 Candle Manufacturers Companies in the US.” 27 March 2011. < http://www.manta.com/mb_35_E73E77N5_000/candles> Plunkett Research. 2011. “E-commerce and Internet Business Overview” 27 March 2011 Yankeecandles.com. 2011.

“Company Profile.” 27 March 2011. < http://www.yankeecandle.com/cgi-bin/ycbvp/ycContent.jsp?page=/Navigation/Non%20Product%20Left/About%20Yankee%20Candle/Company%20Profile>