Le Petit Chef

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Le Petit Chef Executive Summary |

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Ye (Jake) Yuan |

11/10/2012 |

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Le Petit Chef

Le Petit is a French kitchen counter-top appliances manufacturer, microwave oven account for 85% of company sales. The newly-appointed director of R&D Brigitte Gagne and the company faces a challenge: how to keep growing on a mature market when differentiation though innovation is becoming more expensive and profit tends to decrease because of increased competition.

One factor that is contributing to Le Petit chef’s poor performance is the increasing competitive pressures. The Asian consumer electronics manufacturers such as Sharp, LG and Samsung utilized their expertise in electronics and low labor cost to expand to the European market and successfully penetrated into the low-end and mid-range market segment. Their successful penetration to the European market shaved away a good chunk of profit margin for the European manufacture and forcing them to target the high-end microwave oven segment and resulted increasing competition for Le Petit Chef in turn pushed down their profit. Because of the intense competition, the price of microwave oven decreased by 10% each year and further reduced Le Petit Chef’s profit. In the past, the company utilized its very limited R&D resources and expanded their product line from less than 10 variations to around 30 variations but with Asian manufactures successfully penetrated the low-end and mid-range market and Le Petit Chef can’t keep up their R&D development cycle with these well-funded major manufacturers. Therefore Le Petit Chef need to move away from the low-end and mid-range market and focus on the high-end niche market to avoid competition from the Asian competitors and utilize its limited R&D resources to speed up development and try to differentiate in the high-end segment with higher profit margin products to attract more customers and increase their profit margin. Le petit Chef should focus...