Renova Toilet Paper Case Solution & Answer

Renova Toilet Paper Case Solution

 What in your opinion are the problems (if exist) for Renova pursuing this strategy? Explain in Detail and Provide Examples.

With respect to profitability, it is very important to consider the cost of manufacturing product for a private label because following the price reduction strategy (that generates low revenue) and increase in cost would lead to a decrease in profitability for Renova.

On the other hand, the private label is not compromising with its quality due to high market share. Therefore, Renova should not compete with cost in order to produce high-quality tissue products in order to sell their high quality product at a competitive price in order to generate higher revenues and ultimately increase the profit.

Therefore, it is important for Renova to follow a good product manager by not pursing with the low-cost strategy, though customers are very price sensitive, they also demand delivering the product that is not less in quality when compared to competitor’s product, which would help to increase sales and attract large range of distributors.

Problems faced by Renova in following cost-cutting strategy:

In order to compete with cost reduction strategy, the risk in this is that Renova would be unable to produce high-quality products that may lose the current contract with the private label. If Renova wants to decrease the cost, then Renova should put in its best efforts and save cost by reducing the inventory, which is not required at that time. The following example shows the result of competing with the cost by Renova.

Example:  The cost reduction is a neverending effort made by the manufacturer, but Renovo’s production to Private label might generate risk for the company. The private label’s value is increasing 12% that not only focuses on quality but also the power of retailers that impose pressure on each supplier to deliver high-quality products.

Another example for Renova is that, it should develop a cost reduction strategy, that requires proper planning and budget in order to measure the expenses and set the per unit price accordingly.

Problems faced by Renova

1.      From a technological point of view, what can Renova do to have a real impact on the market? Explain in Detail and Provide Examples.

The biggest challenge from a technological point of view for Renova is establishing an innovative range of products, and it has gained large market share. Various technological innovations such as launching of thick, soft, and strong tissues based on usage and convenience of customers, development of tissue roll that has the advantage of the same quantity and less space……………….

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