SKULLCANDY Headphone Company: Case Study Example

There are various companies across the globe that trade on similar products. The level of competition between these companies fluctuates on a daily basis due to the prevailing globalization and the dynamic nature of the market. Nevertheless, each company has a set of goals and objectives to be achieved and therefore must formulate attainable policies and procedures to ensure that the goal is achieved regardless of the degree of competition received from rival companies. SKULLCANDY Headphone Company has formulated business level strategies that have enabled it to establish faster and acquire larger market share, creating a competitive advantage over their competitors in the business of headphones. This paper assesses the scope of market SKULLCANDY Company had before Alder came in, the strategies that the company is using to increase profitability and its sustainability through market level strategy that is utilized. It also describes various features of product development strategy that the company is using, and the risks and benefits involved.

From the analysis of SKULLCANDYS operation case study, it is evident that the company has opted on the focus differentiated strategy since its inception. Alden has been suffering in the organization due to the absence of devices that could connect to cell phone and mp3 player simultaneously and for this reason; he came up with the idea of making headphones so to solve the problem that affected people who were participating in extreme games such as ski lift and snow boat riding. This shows that Alden had the intention of solving issues of a particular market niche (Millisa, 2017 pg 12). At the beginning, his hope was to acquire a huge and lucrative market share from the extreme players. Alden seemed to have no other target market other than the gamers. He had no idea that other categories of people would consider being part of the market and benefit from his new invention which was the headphone re-invention. However, it is evidence that Alden is transforming his strategy idea to broad differentiated strategy. After the booming market acquired after supplying the headphones to other stores in America, he decided to increase the production of headphones to supply to the increasing segments of consumers in the market. He extended the market to China to a company that could produce a larger number of headphones enough for everybody in the market and not just gamers (Johnston,, 2009pg 5). He goes a step further to apply various modes of advertisement, including the social media such as Facebook and Twitter and sponsoring game competitions to increase the number of people aware of the new device he had brought to the market. The headphones were also of high quality and suited the hip-hop musicians and disc jockeys. This factor helped satisfy their needs and improved on brand identity and the overall sales across different market segments.

Aldens innovation has had a significance influence to the headphones market across the globe. The innovation made incredible changes in the headphone market. When he came up with the idea of making headphones which could connect to both cell phone and mp3 media player simultaneous, the industry was performing dismally in relation to quality of the headphones. The industry was low capital revenue and a small market share. This is because the headphones that had been designed previously had lot of shortcomings including their low working capabilities, poor sound quality and easily broke down (Orr, 2013 pg 9). Most people would not go for the headphones because of the health-related side effects which affected users hearing ability. The headphones that he brought to the market had buttons that could enable users receive calls without the necessity of receiving it from the phone. With the innovation, the targeted users would easily access their phones with while at the same time playing music or engaging in their activities. Skullcandy headphones could, therefore, be used by a wide variety of people with variable interests. The headphones he designed also had broad ear pads and this makes it less defective in the ears while using. He utilized good materials that would last longer and therefore the users would not have to buy the headphones occasionally and hence were inexpensive. Skullcandy headphones proved its high quality and efficiency for use by the different audiences in the market. For these reasons, the company was able to increase their sales and increase their profitability in the market. The incredible futures created enthusiasms among the audiences in the market.

The improved functionality of the headphones that Alden brought to the various audiences across the globe managed to serve users adequately and satisfactorily. Seemingly, Skullcandy headphones were health friendly as compared to the other headphones that existed in the market. This helped establish a sustainable trust among clients for the headphones and hence increased sales for the Skullcandy brands irrespective of the high prices. Skullcandy headphones, therefore, managed to achieve a larger proportion of the market share. Additionally, Aldens headphones were made of high-quality raw materials that were highly attractive to the prospective clients. The headphones designed were also strong and hence much more durable, and therefore were economical to the audiences. The audiences therefore, fell in love with the product and could not afford to buy other headphones without the Skullcandy logo (Prescott,2009 pg 74). Moreover, the marketing manager was able to formulate brilliant advertisement ideas, such as sponsoring clubs and awarding them with prizes with the Skullcandy logo and also used the media advertisements in the search for more audiences. Subsequently, Alden decided to maintain the value of the new brand by supplying the newly modified headphones only to his earliest market to ensure that the pride was maintained by making it unique. After a while, other companies started to imitate Aldens innovation into their production. For this reason, he decided to go back to the drawing board and together with other intellectuals in engineering; they were able to build more advanced headphones that are unique. It is therefore clear that the strategy for marketing that Alden has is sustainable and competitively advantageous to the brand in the market.

Finally, Skullcandy came up with a strategy for winning the market against any other brand producer. Alden decided to develop a unique headphone and designed headphone that would never be made by any other manufacturer as a way of maintaining its market share through the production of unique and quality headphones. The developed product was to have various features that worked in benefiting the company in various ways, despite the rare risks that would arise from the development process as described in the table below.

Some of the headphones had straight while some had coiled cords. This ensured that the whole market was satisfactorily served. DJs need for coiled cords and mass public demand for straight cord headphones was satisfied.

The new headphone was designed to have a sound quality that was not very clear (Skullcandy, 2016 pg 45). DJs wanted headphones with sound qualities that are not so clear and so their demand was satisfied.

Some of the mass market consumers love clear sound qualities and so the company was at risk of losing a portion of the market.

The developed headphones were made such that they could be worn by both lefty and righty. This ensured that everybody could use the headphones irrespective of his or her side of activity, whether right or left.

The new developed headphones were made of ear pads which are washable, tough and replaceable This would help in cost saving as the audience would not necessarily need to buy a new earphone if it developed a defect due to dust.

The tough materials are expensive and would result to increase in the prices of the headphones, making part of the market to shy off buying the headphone.

The developed version of Skullcandy headphones would be tough enough, durable, ease usage for both right and left-handed individuals and satisfy both the DJs and mass market consumers. They are therefore likely to attract many more market. However, there is a likelihood of losing customers because the sound quality that is not too clear and the high expected costs. It is necessary that the company increase the spending on advertisements so that they can campaign against the fact that the price is high. Once the quality has been highlighted, the market would buy despite the high costs.

Bibliography

Johnston, L 2016, 'Incipio Acquires Skullcandy In $177 Million Deal', TWICE: This Week In Consumer Electronics, 31, 11, p. 5, MasterFILE Premier, EBSCOhost, viewed 17 November 2017.

Milissa A. Schilling Skullcandy Inc - Company Analysis and ASR Ranking Report', Alpha Street Research Reports SPORTDiscus with Full Text, EBSCOhost, viewed 17 November 2017.

Orr, H 2013, 'SKUL - Skullcandy Inc - Company Analysis and ASR Ranking Report', Alpha Street Research Reports, pp. 1-9, Business Source Complete, EBSCOhost, viewed 17 November 2017.

Prescott, J 2009, 'Boul Full of SKULLCANDY', Skateboarder, 18, 10, pp. 68-77, SPORTDiscus with Full Text, EBSCOhost, viewed 17 November 2017.

'Skullcandy Serious About Athletic Market' 2016, TWICE: This Week In Consumer Electronics, 31, 10, p. 45, MasterFILE Premier, EBSCOhost, viewed 17 November 2017.