Question

Links to two news items and a short video discusses the Blendtec's success in its content marketing program. The company is now aiming that program at social media influencers.

News Article 1: Making a Splash Felt Around the World

News Article 2: Splash Corp. Accelerates Entry in another Product Categories

Video: Splash Corporation AVP

Critically analyze the information contained in these sources. Then write well-thought out responses to following questions (about 1-3 pages in length, at least 600 words):

1. Describe Splash Corporation’s corporate strategy and business strategy.
2. Summarize Splash Corporation’s strategy by creating the the strategy diamond tool (see Section 10.4 "The Five Elements of Strategy" of the text). Make sure that it includes details of the following components: Arenas, Differentiators, Vehicles, Staging and pacing, and Economic logic (see page 346 of text). [You may draw the strategy diamond tool by hand and take its photo to include in your submission.]
3. News articles 1 and 2 discuss Splash Corporation's foray into other product categories and its overall international expansion approach. Discuss, whether or not Splash Corporation’s international expansion strategy is sound. Justify your rationale in either case.

Answer 1

Answer 1

Splash is a consumer-facing personal care and cosmetics brand that's based out of the Philippines. Two of the company's best selling products are its skin whitening cream and hair products. Splash also sells other products like exfoliants and soaps. However, unlike most personal care and cosmetics brands, Splash is a direct selling company. The difference between Splash and regular consumer and personal care brands is that Splash doesn't rely on a network of distributors and retailers in order to sell its product to its customers, it uses direct selling. Direct selling commissions a group of individuals or individuals to purchase their products at a wholesale rate and requires them to sell it to potential customers that they may know from their circle of friends, family or colleagues. Splash is planning on expanding to markets outside the Philippines. It is important to note that direct selling is another form of multilevel marketing and while the regulations in the Philippines may allow Splash to operate freely, their business model may be subject to strict regulatory scrutiny in other countries and markets. However, as of 2018, Splash has diversified its distribution network into traditional retail chains such as supermarkets, mom and pop shops and pharmacies along with its traditional direct selling model.

Answer 2

The strategy diamond has the five elements of the strategy which include Arena, Vehicles, Differentiators, Staging & Economic Logic. Here's an analysis of Splash's strategy using the strategy diamond tool.

• The arena is an element of strategy that focuses on product positioning. This includes the target market, customer demographics, etc. Splash's geographic arenas include the Philippines, Africa, South East Asia & the Middle East.

• The vehicle is an element of strategy that focuses on distribution. Splash uses a mixture of direct selling as well as a traditional retail channel in order to distribute its products.

• The differentiator is an element of strategy that focuses on product differentiation. Splash's product differentiation lies its price and its unique light feel technology.

• Staging is an element of strategy that focuses on phases of business development and expansion. As of now, Splash has completed many stages, it has successfully operated in the Philippines for 30 years with a strong customer base and a robust direct seller network that's also backed by a retail distribution and sale network. Splash is currently contemplating expansion into newer markets.

• Economic Logic: Splash's economic logic is centered around economies of scale. Since splash manages to sell a large number of products, they are able to lower their production cost per unit.

Answer 3

I don't think Splash's international strategy is sound because of its over reliance of direct selling for almost three decades. Splash is similar to companies like Amway or Herbal life which rely on multi level marketing or direct selling in order to sell its products. Multi level marketing has been outlawed in almost all major economies around the world. While direct selling companies use loop holes to work around this regulatory hurdle, the fact sill remains that its business model is not suitable for international expansion. While Splash does have a retail distribution network, since the company hasn't had any exposure or previous experience in branding, marketing in a perfectly competitive market along with large FMCG, cosmetics and personal care companies, I don't think that it'll stand a chance in international markets.