Yeti in 2020: Can Brand Name and Innovation keep it Ahead of The Competition
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Yeti in 2020: Can Brand Name and Innovation keep it Ahead of The Competition
Introduction
Yeti was founded in 2006 by Ryan and Roy Seiders and is an American manufacturer (Bruni, 2022). It specializes in outdoor commodities such as vacuum-insulated stainless-steel drinkware, America,-made ice chests, soft coolers, and related accessories. The Yeti Company is based in Austin, Texas. In Austin, Yeti has six retail stores (Lamichhane, 2019). Its primary competitors are Igloo Products Corporation, RTIC Coolers, Coleman Company, and Hydro Flask Company. To survive in the competitive world, Yeti applies the economies of scale techniques in addition to applying a high-quality production strategy (Onyusheva and Vasuvat, 2017). This paper will first discuss the role of Porter’s Five Forces in Yeti Company. In Yeti Company, its versatile planners can use the gathered data via Porter’s Five Forces framework to make several innovative choices that will increase their competitive position. Also, this paper will discuss the essence of VRIN Test in determining Yeti’s sustainable competitive advantage. The tool will help Yeti understand its core strengths based on its resources. This paper will last discuss the significant issues Yeti faces and some techniques its CEO can apply to foster a highly competitive position and ensure Yeti Company gain enough profit.
Analysis
Understanding the driving forces of the cooler and equipment industry requires a thorough analysis of Porter’s Five Forces. Porter’s Five Forces include supplier’s bargaining power, the buyers’ bargaining power, the threat of new entrants, rivalry among the existing organizations, and the threat of substitute goods and services (Bruni, 2022). Yeti company’s versatile planners can use the gathered data via Porter’s Five Forces framework to make several innovative choices. Also, the tool will allow Yeti to understand why it should apply the economy of scale technique. It weakens the threats of the new entrant of other firms and also makes it easier for them to innovate products and sell at lower prices (Ricci, 2022). Yeti Company also deals with the force of the new entrants by ensuring they use all the present economies of scale to give them a cost-friendly advantage. Also, while the other firms have lower cost control discouraging their bargaining power to their various suppliers, Yeti buys its raw materials from the suppliers, and if their suppliers’ demands do not soothe their expectations, they get new suppliers (Onyusheva and Vasuvat, 2017). They accommodate several suppliers that ensure its supply chain remains efficient too. On the other hand, the buyers’ bargaining power in the cooler and equipment industry is weak. This thoroughly weakens Yeti’s price control. To handle the situation, however, Yeti applies high innovation and differentiation strategy to attract a more extensive customer base. This, too, gives them a competitive advantage. Yeti understands that dealing with the rivalry force requires them to ensure they produce high-quality products. Their products also significantly impact their customers as they are produced based on the critical information they obtain from the customers.
On the other hand, the SWOT Analysis is an effective tool to help understand the strengths, weaknesses, opportunities, and threats Yeti faces. According to the SWOT analysis, the significant strengths Yeti presents include having deep new products and services pipeline going into the competitive market. This increases brand awareness and sales (Thompson et al., 2022). Also, Yeti has several outlets in different nations. The various retailers selling its products ensure it continuously expands its market (Lamichhane, 2019). Additionally, it has a solid mutual connection with its suppliers and dealers. This ensures it progressively enjoys robust networks from a large group of people. Besides, a strong business connection ensures a firm promotes its products and services, giving it a competitive advantage. Also, Yeti applies a low-cost operational structure enabling them to produce products at a meager cost while maintaining high-quality standards. Also, based on the SWOT analysis, the weaknesses experienced by Yeti Company are that it spends less on research and development. This often costs a firm’s market share as their competitors will likely take advantage of the latter. Also, Yeti manufactures its coolers in China and later delivers them to the US through container ships. It prompts numerous supply chain challenges due to core issues, including a country lockdown. Besides, Yeti rents several properties. The company pays a more significant amount in rent as well as paying for several operational costs. The main opportunities presented to Yeti include Yeti’s capacity to open online platforms and stores to sell its unique products. It benefits heavily from the prevalence and opportunities it experiences in e-commerce. Also, Yeti Company promotes its products via channels such as Instagram, Facebook, and YouTube (Onyusheva and Vasuvat, 2017). This helps them sell its products quickly, as well as hiring social media, production, and content management workers to ensure their site grabs a vast customer base. Yeti also has constant innovation and development, such as the new automated machines. It produces high-quality and durable commodities at reduced costs. The threats to Yeti Company include stiff competition. Yeti’s competitors are using new technologies to improve their operations, manufacturing, and marketing process. Besides, its competitors such as Otterbox, RTIC, Hydro Flask, and ORCA are not producing too high-quality but cheaper products.
VRIN Test is paramount in determining Yeti’s sustainable competitive advantage. The tool helps Yeti understand its core strengths based on the resources it has. Since time immemorial, the VRIN test has been critical in determining a business’s strategic position and advantage in addition to its competition level (Lamichhane, 2019). The tool help Yeti notes how it can venture efficiently and meet its production standards and process based on the available resources. This also ensures it grows its competitive, brand, and revenue level. Sequentially, it can help Yeti understand how its strategic diversification and differentiation level it critical for it to meet the expectation of the overlying market. On the other hand, the VRIN test can also help Yeti understand the prevailing valuable opportunities and competencies it has. As a result, it can not only grow but also develop as well as expand its businesses. Understanding the firm’s valuable competencies are essential in helping the firm note the immediate implementation techniques it should apply. Yeti’s practical competencies critical for them to remain competitive sustainable includes; the capacity to participate in transparent activities on social media platform through its social media content professionals (Onyusheva and Vasuvat, 2017). This increases its brand image, and it can remain in the competitive market through recognition. Yeti is also versatile in producing excellent products that meet consumers’ demands and needs. This ensures it penetrates comfortably in the competitive market.
The primary competitive strategy applied by Yeti Company is a high-quality production. Yeti’s overall presentation is very excellent. Even when the pricing of its various products is very high, Yeti’s products are very high-quality and meet the expectations of the customers. Besides, it applies the premium pricing technique. It incorporates all its presented expenses to establish a price for its various products. Yeti continuously penetrates the competitive market by producing very high-quality products. For example, Yeti’s coolers are exceptionally high quality, keeping the ice longer. Also, they have status presentations and durable characteristics. Its competitive strategy is also vision-oriented. They ensure that their highly-produced products meet the expectations of the transforming market segments. They ensure that their various innovation projects meet the experiences of their client. Providing a more luxurious impact to their customers remains at the forefront of Yeti Company. This ensures they generate constant revenue even during the low season.
Also, according to Yeti’s financial evaluation, its revenues constantly change from one period to the next. The changes are linked to the ongoing weather and climate changes. Since time immemorial, the cooler machine has been purchased based on the seasons (Trnavsky, 2020). Seasonality has a significant outcome on business activities. During cold seasons, very few people are likely to purchase the more astonishing machines manufactured in Yeti (Ricci, 2022). A decrease in the demands of the commodities affects the firm’s overall production, sales, and profit. This is evidence as presented in the calculation presented after the reference page.
Issue Identification
The key issues confronting Yeti headed into 2020 can be fully understood via the help of the SWOT and PESTEL analysis. The vital primary problems would thus include the environmental regulations, laws, and standards which constantly change, impacting Yeti’s overall operation. Also, Yeti is one of the firms operating in several markets. These markets have distinct environmental regulations, laws, and standards by which they must abide specifically. Besides, ecological forces among them are climatic, and weather changes impact the time of waste management technique Yeti must apply, which can be very costly to the firm. Besides that, the Yeti’s Rambler commodities are very expensive. Most critics have said that Yeti’s rambler is no different from most of its competitors. This, according to them, is one of the reasons why Yeti continuously faces intense competition. Worldwide, Yeti’s rambler product is expensive since it is sold at $34.99 (Lamichhane, 2019). A similar product on Amazon, RTIC, is offered at $15.19 (Lamichhane, 2019). Consecutively, the rambler’s performance was identical to Ozark’s Walmart’s tumbler. Inefficient product differentiation makes consumers purchase similar products from other companies, especially when their prices are lower.
Alternatives
Yeti should efficiently differentiate its product design, marketing, packaging, and pricing. A significant differentiation strategy applied in Walmart is pricing. Walmart ensures that its products are unique while keeping its prices low. Its roll-back technique is designed to efficiently monitor its competitors’ pricing and offer a lower price that attracts most of its customers. In addition, Walmart succeeds in the competitive market by creating services and products unique to its customers (Lamichhane, 2019). They offer their customers something unique that most of their competitors do not provide. Customer-friendly prices, in addition to focusing on bulk sales, allow Walmart to maximize its sales instead of overpricing them. It is a technique Yeti can implement to attract the right customers. However, one disadvantage of the pricing technique is; that it may lead to lower supply. If companies provide lower prices for their products, they may be less incentive to supply the goods and the number of profit they get when the market declines.
Also, dealing with the negative outcome of intense competition will require Yeti to apply the economies of scale technique. This is essential for fighting any new entrants coming into the vast markets it operates in mainly. Implementing an effective cost technique will help Yeti right the most targeted customers and, therefore, an added competitive position (Bruni, 2022). An effective cost strategy allows a firm to make unique commonalities in addition to making them retain their customers. Also, it will ensure it attracts suitable suppliers to fulfill the objectives of its supply chain. The suppliers will comfortably meet the organization’s needs and build an efficient customer base. Despite the advantages of the economies of scale technique, it can heavily impact the cost of production. This is because it reduces the per-unit fixed cost. Due to increased production, the fixed cost spreads on the firm’s output. It decreases per-unit variable cost and often occurs when the expanded production scale increases the production process efficiency.
Recommendations
Increasing its competitive position in the industry will require Yeti’s CEO, Matthew Reintjes, to establish a unique value proposition for its company. As opposed to using ordinary value propositions such as service levels, pricing, brand recognition, and quality, Reintjes will have to create a unique value proposition. In the organization, it ensures a firm’s products are clearly differentiated, continuously attract and retain customers, and improve its revenue and competitive position (Bruni, 2022). Also, Yeti’s CEO will have to understand the footprint of its customers. Customers in various markets have different interests. Other than being aware of their buying behavior, Yeti’s CEO should note their consuming patterns and how they can improve their customers’ needs.
Also, to increase profitability, Reintjes will have to concentrate closely on the firm’s sales. The two ways to increase profitability within a firm include selling more to the existing profitable customers and finding similar customers to sell the products to them (Ricci, 2022). As a strategy, it allows the organization to work with their best customers in addition to finding the newest customers who will increase the firm’s sales and thus higher profit.
Conclusion
In Yeti Company, its versatile planners can use the gathered data via Porter’s Five Forces framework to make several innovative choices. Also, the tool allows Yeti to understand why the economy of scale is challenging for other firms to achieve and therefore weakens the threats of the new entrant force. This makes it easier for firms to manufacture its products and sell them at lower prices. According to the SWOT analysis also, the significant strengths Yeti presents include having deep new products and services pipeline going into the competitive market. This increases their brand awareness and sales. On the other hand, VRIN Test is paramount in determining Yeti’s sustainable competitive advantage. The tool helps Yeti understand its core strengths based on the resources it has. The VRIN test has been critical in determining a business’s strategic position and advantage in addition to its competition level. Also, increasing its competitive position in the industry will require Yeti’s CEO to establish a unique value proposition for its company. To improve its profit, Yeti will have to concentrate closely on the firm’s sales. The two ways to increase profitability within a firm include selling more to the existing profitable customers and finding similar customers to sell the products to them.
References
Bruni, M. (2022). Yeti products: a cultural phenomenon-forecast and valuation (Doctoral dissertation). https://run.unl.pt/handle/10362/142098
Lamichhane, S. (2019). Marketing mix analysis to attract more customers case study: Sita Air PVT Ltd. https://www.theseus.fi/handle/10024/160965
Onyusheva, I., & Vasuvat, K. (2017). STRATEGY FOR BUSINESS SUCCESS: THE CASE OF YETI LLC. The EUrASEANs: journal on global socio-economic dynamics, (6 (7)), 102-110. https://euraseans.com/index.php/journal/article/view/76
Ricci, G. M. (2022). Yeti products: a cultural phenomenon-company and market analysis (Doctoral dissertation). https://run.unl.pt/handle/10362/142097
Trnavsky, A. (2020). YETI: A Cooler Way to Market Your Product. https://digitalcommons.calpoly.edu/expindsp/9/
Thompson, A. A., Peteraf, M. A., Gamble, J., & Strickland, A. J. (2022).Yeti in 2020: Can Brand Name and Innovation Keep it Ahead of The Competition: Concepts and cases. McGraw-Hill.
