Sol Silva - notes for saffronart case PDF

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Sol Silva 916326130 BUS 690-04 Case: Saffronart.com 1. Negative: Unstructured art galleries left pricing uncertain in different galleries Pricing based on gallery reputation and relationship with artists No pricing guarantees, long periods of stagnation, and no legitimate way to check authenticity Lack of interest in Indian Art market Small segment of Indian Art collectors New firm needs to build relationships and reputation with sellers Positives: Paradigm shift to interest in Indian Art in the 1980s Global reach of the internet proved to be a benefit for Minal and Dinesh’s online model Customers actually willing to buy art online proving the online model works Increased economic productivity and liberalization of India 2. New Entrants: Strength of Indian Art Market led to more competition around 2006. This helped promote the growth of more auction houses, the primary market, startup firms, many of which were located in India Rivalry: Christie’s and Sotheby’s gain specialists, focus on modern Indian art, establish relationships with well known galleries Substitutes: Christie’s and Sotheby’s Christie’s and Sotheby’s Bargaining Power of Buyers: Saffronart offers lowest buyer premium compared to Bargaining Power of Sellers: Due to increased competition from Christie’s and Sotheby’s, Saffronart is forced to offer lower commissions to consignors to remain the market leader

3. Entered as an online art auction house Saffronart that customers wanted to see texture and true colors of the art they were going to purchase. Legitimacy was constructed through holding series of auctions in LA, New York, Hong Kong before initial online auction and establish two permanent galleries in New York and Mumbai, allowed customers to experience the art and get a closer look. Only accepted works for consignment that were authentic and did so by partnering with reputable galleries. Art was then sent to either New York or Mumbai galleries to take photos to catalogue for auction. Buyers then had the opportunity to get advice and interact with the art community. 4. Offered lower buyer premiums compared to competitors, legitimacy through authentication, Minal’s and Dinesh’s technological competence 5. New entrants (physical and online), technological adaptability, offered less commission when new entrants entered the market, competitors in the same market (India), competitor partnerships with galleries and availability of specialists...