Minh Long I Porcelain Co. Ltd.
The case is set in early 2009, at a time when Vietnam is rocked by the global recession. It opens with the discovery by Ly Ngoc Minh, CEO of the porcelain manufacturing company, Minh Long I, that Metro, a chain of seven department stores across Vietnam, has discounted the selling price of its products and has no intention of bringing the price of its porcelain pieces back to the level that was agreed on in their sales and distribution agreement. The backdrop for this decision comes in the midst of a turbulent economy characterised by high inflation and 20%-plus interest rates.
Minh Long I management, seeks to preserve their position as a premium brand in the market and must decide whether to terminate the agreement with Metro, and potentially other distributors, or allow distributors to set their own prices. Should Minh decide to change the company’s distribution strategy in light of this new economic reality or continue with a high-price high-touch emphasis?
This case provides readers with an opportunity to view the development of a family business in a fast growing emerging market, in which despite an astronomical growth rate, there is financial stress within the channel. Issues regarding price maintenance, brand positioning, and value adding activities are central to the case discussion. Additionally this case will familiarise students with some of the peculiarities of the Vietnamese marketplace. The case fundamentally asks students to understand how product and channel alignment is central to a successful business.
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