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Gemini Electronics Essay

1. What was the business model of Gemini? The business model was to produce TV’s on a just-in-time basis to pass on most of the distribution savings to the consumers. He planned to cater to the big box retailers such as Best Buy and Walmart to name a few, who wanted to cut down their supply chains by sourcing TV’s in North America. By shortening the supply chain you increase reliability making it easier to address uncertainties as well as building lean production to eliminate waste to reduce production time and cost. a. What were the key success factors that determined its past profitability? The key factors that determined its profitability was the reputation for having excellent quality at affordable prices below the competition. b. What are the risks Gemini is facing now? The risk Gemini is facing now is the recessions, the Korean and Japanese competitors lowering their prices, technological trends emerging such as the 3D TVs and video phone capabilities, and difficulty trying to convince major retailers to carry their product. In order for those products to be carried, retailers pressed for more generous credit terms and no interest on overdue accounts.

2. What is your assessment of the company’s recent performance and current position in the marketplace? Gemini has been grown and holds the U.S. market share at 35% proven itself to be a strong contender in this industry. Through the years 2005-2008 net income increase substantially which could mean that there was sales growth and improved or reduced cost in operating efficiency. With a continuing increase in net income, there are potential opportunities for stock price and market cap increases. This will in turn make Gemini a favorable company for potential investors. In 2009 the net income decrease but that could have been due to the recession occurring in that time frame. Consumers probably didn’t have the money to splurge on TV’s and electronics. There was also the threat of the Sony 3D television and video phone capabilities. Maybe the consumers were more attracted to what was new and trending at that time.

3. Does Gemini need to establish operations outside the U.S. or can it survive as a domestic company? It doesn’t need to because at this moment the company is very profitable domestically. That would definitely be something to consider in the future after first branding its products as “made in the USA”. I also agree with Wang in strategically planning to develop Gemini’s product line to be able to complete internally with competitors such as Sony and LG. a. What operational issues is Gemini likely to face if it expends internationally? Issues Gemini could face would be the existing competition, regulations, financial risk such as the exchange rate between currencies could lead to disappointing return on investments. There may be issues with accessibility to supplies needed when dealing with tariffs and fees to ship products in.

4. What is your assessment of Gemini and what strategies do you recommend Gemini to follow. My assessment of Gemini is that the company is operating in a capacity to where, it can generate revenue, cut operational and distributional cost, and still offer savings to consumers without decreasing the price of the units sold or quantity for certain products indicating that the company is continually growing despite the 2009 occurrences. I recommend that they rebrand themselves as a “made in USA” product and continue to become innovative and technology savvy to develop their product line in order to compete with other big name competitors.

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