Elgiganten A/S Case Study
As stated in the article, Elgiganten A/S has been the most anticipated online-shop in Denmark for 3 years in a row. They’ve used a concept which’ve given the opportunity for customers to not only shop in their in-store shops typically located in large malls or on renowned streets, but also online, which’ve lead to a positive outcome.
The article also states that Elgiganten A/S were the first company in their competitive market margin to start online-shops, which they’ve had loads of economical advancements from. This is either due to the fact that their site is consumer friendly and offers a large amount of products in a wide range, or that the consumers are used to the combination of in-store and online-shops …show more content…
I’ve chosen to use Ansoffs Growth Matrix and the appendixes to give my assessment and appraisal for the growth strategies Elgiganten A/S is using.
Elgiganten A/S has used the market development strategy to focus on business centers, which should address the company’s corporate customers. This is the development of a new segment of consumers in their market.
Elgiganten A/S has chosen to widen their range of products in a specified area, which is the kitchen-furniture segment, since they already have a ton of home appliances in their product-portfolio. They’re stating that their current position in the market is satisfactory enough, to expand into this segment.
Profitability …show more content…
The calculations in total are made in appendix 6 and states the following results.
The contribution margin for a Boat Trailer 305 is 10.988 kr.
This leads to a contribution degree of 40,70% as stated in the table above.
To the assessment of how many extra Boat Trailer 305 the company would have to sell, in order to obtain profit from the commercial campaign, we have to base our calculations off an advertisement-zero.
Through this calculations, we can look closer into the ratio between the costs for the commercial campaign and the contribution margin per unit.
The calculation is made in appendix 6 and the results are:
As stated above in the table, the company has to sell 11 more Boat Trailer 305 in order to cover the costs for the promotion campaign. In these occasions, we’re rounding up from 10.92 to 11 due to the fact that we can’t sell .92 Boat Trailers and it wouldn’t cover the costs if we only sold 10.