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Case: 3: Franz Collection, Inc

Franz Collection was established in Taiwan in 1984 as an OEM manufacturer, but later transitioned to an ODM and launched its own porcelain brand. It has since expanded globally but faces the problem of whether to diversify beyond porcelain into decorative silk. Alternatives considered are launching new porcelain collections inspired by different European styles or a middle-class Asian brand, and expanding home decor elements. The recommended solution is to focus on core crockery and diversify the product line to target different markets, such as launching collections inspired by different cultures.

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Akhil Vinayak Khan
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405 views

Case: 3: Franz Collection, Inc

Franz Collection was established in Taiwan in 1984 as an OEM manufacturer, but later transitioned to an ODM and launched its own porcelain brand. It has since expanded globally but faces the problem of whether to diversify beyond porcelain into decorative silk. Alternatives considered are launching new porcelain collections inspired by different European styles or a middle-class Asian brand, and expanding home decor elements. The recommended solution is to focus on core crockery and diversify the product line to target different markets, such as launching collections inspired by different cultures.

Uploaded by

Akhil Vinayak Khan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Franz Inc.

CASE: 3
FRANZ COLLECTION, INC

Akhil Vinayak.K
Rahul Krishananunni
Suneil Gupta
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Franz Inc.

Executive Summary
(Seagull Décor Co.) established in Taipei in 1984,in early days
the company only made crafts, gifts, ornaments and home décor
items on order for foreign companies, it operated as a original
equipment manufacturing (OEM) company in its early stages of
development. The company just followed the designs given to
them by customers and produced exquisite Chinaware. Pricing
was crucial for winning orders. In order to cross sell products to
different customers, they moved in to a different business model,
original design manufacturing (ODM).
Seagull had established a new factory in Xiamen, China. They
established their own design department which specially
concentrated on achieving fusion of Far Eastern and Western
styles of design, their designs were globally acclaimed. In 1995,
Seagull Décor Co. Ltd. became the biggest gift manufacturer
internationally.
Franz collections Inc. expanded exponentially, it was established
in United States in 2001.They launched their first brand .(Papillion
collection). They have branches at North America, Europe,
Australia and New Zealand to endorse their Franz products. The
sales in Taiwan were about 30% of the global sales.
This case talks about their branding and positioning success
stories and this case describes the managerial dilemmas in
establishing a global brand faced by manufacturers in Taiwan and
the neighboring countries.
Core problem in this case is whether to diversify into silk décor
products. We believe that Franz should concentrate on the core
competencies i.e. (crockery and China curios) and innovating in
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Franz Inc.

sectors that they are established & strong, and diversify product
line to cater to target market.

Introduction
The case describes the three-stage transformation of a Taiwanese
company - from an original equipment manufacturer (OEM) of small
gifts for Western European customers, to an original design
manufacturer (ODM) providing design and production of home d cor
and gifts to customers in Europe and the United States, to an own
brand manufacturing (OBM) company launching its brand of porcelain
tableware targeted at the global market. The story of Franz Collection
is a story of product outsourcing and international cooperation, where
OEM subcontractors in Asia have tried to set up their own marketing
channels and brand names to bypass their Western clients and
appeal directly to consumers. This case describes the managerial
dilemmas in establishing a global brand faced by manufacturers in
Taiwan and the neighboring countries.

Problem Statement:
Should Frank collection diversify beyond porcelain to
decorative silk?
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Franz Inc.

SWOT Analysis
Strengths –

 Low cost production was one of the major competitive


advantages of this company from the beginning.
 Strong relationships with the partners and long term clients.
 Creative designing team that created products unique to the
company.
 An able facilitator in Mr. Francis Chen, who had the vision to
grow beyond expectations.
 Promotion of their company through design services to their
clients.
 Ability to relate to the oriental and western populace with
their products.
Weaknesses –

 Lack of experience in the porcelain industry.


 Lack of knowledge in gathering research, determining value
proposition, identifying customer preferences.
Opportunity-

 United States could increase Seagull‘s customer base and


place them in a more competitive market.
 Porcelain is a niche market in most parts of the world.
 Tradeshows helps the company acquire new customers and
also helps them better understand competition.
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Franz Inc.

 Embedding furniture and silk with ceramics would help the


company further diversify.
 Bankruptcy of Wedgwood increased potential to capture
others markets.
Threats-

 Attacks on countries by extremists.


 Most of the porcelain players were historical and well
established brands.
 Global Financial crisis.

Alternatives:
 Launching exquisite pottery collection from various
traditions, like the Dutch and French and other European
styles to harness the potential of those markets
 Launching a pottery brand segmented for the middle class of
Asia with the traditional designs of their regions.
 Expanding more into in build decorative elements in home
décor and office spaces.
Evaluation:

 Producing pottery for the European market, with good


design detailing and finesse to suit the needs of the
European and global markets will give them a
competitive advantage. Pricing the product at higher
level to attach esteem to it is also a method to reach to
these markets. E.g.: Banquette of emperor series, they
can come up with a Tsar series with Russian artistic
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Franz Inc.

impressions similarly a Bourbon collection for French


and Milan collections for Italian taste
 Targeting the (rich and middle segment) of middleclass
people, which is growth base in Asia and BRIC
countries. With medium costly good of high quality and
authentic designs relating to the target customers.
Themes should be related to local culture and folk lore
for max impact.
 As China has a lot of furniture manufactures, forging an
alliance with a good furniture company to provide
pottery and china to incorporate into furniture designs to
make it more appealing is a good option.

Solution:
 Concentrate on the core competencies (crockery and
China curios) and innovating in sectors that you are
established and diversification of product line to cater to
target market.
E.g.: Like banquette of the emperor series, they can
come up with a Tsar series with Russian artistic
impressions similarly a Bourbon collection for French
impressions and Milan collections for Italian taste.

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