GoldenHome: The Dilemma of High-End Strategic Positioning

Since its establishment in 1999, Xiamen Golden Home Co., Ltd. (GoldenHome) had adopted a high-end strategic positioning for its professionally produced kitchen cabinets. The company had first established a high-end brand image by differentiating its service and providing consumers with the ultimate full-process shopping experience. It had then consolidated a high-end perception of its products in the minds of its target customers by continuously researching and developing new processes and selecting high-quality materials. When changes in market and competition patterns led it to expand into new home-furnishing categories such as wardrobes and wooden doors, the company worked to transform its brand to encompass the entire range of customized home products. While customers had long recognized the high-end nature of the company’s kitchen cabinets, it had been more difficult to transfer this brand recognition over to the new product lines. Moreover, substantial changes in the competitive landscape had made the company’s original high-end positioning ambiguous. In 2022, the company faced a dilemma about its future development: Should GoldenHome use high-level strategic changes to establish its entire series as high-end products, or should it implement differentiated positioning for different product lines, maintaining the high-end positioning of its kitchen cabinet products while positioning other product lines for mass-market consumers?

This case is mainly suitable for undergraduate- or graduate-level students in courses on strategic positioning, strategic transformation, and strategic management. It can also be used to discuss topics related to strategic choices, persistence and change in strategic positioning, customer value innovation, and the role of the industry environment. The case reveals two main points: Firstly, whether they succeed or fail, most companies face a choice during their development between strategic focus and strategic diversification, which means it is necessary to clarify the choice and the reasons behind this choice. Secondly, when changes in the internal and external environment cause a shift in companies’ original strategic positioning, they must determine how to respond —that is, how to choose a direction for future development. In short, after working through the case and assignment questions, students will be able to do the following:<br><br><ul><li>Outline the basic concepts and characteristics of corporate development strategies and identify reasons for a change in strategy. </li><li>Clarify the basic connotation and formulation basis of strategic positioning, and master the basic methods of customer value innovation. </li><li>Explain why a company might choose a certain strategic position and how its behaviour would contribute to a strategic fit with this strategic position. </li><li>Make a decision regarding a specific strategic positioning dilemma.</li></ul>

• strategic transformation
• high-end strategic positioning
• focused strategy
• diversification strategy