What Are the Current Strategic Situation and Options Available to Sonance?

What are the current strategic situation and options available to Sonance? Please evaluate each option.

Current Situation: In early mid 1990's Sonance had positioned itself by selling exclusively innovatively designed in–wall speakers through custom installation dealers. While the market was adjusting to the new and lower priced competitions, in early 2000, an outside CEO Chief Brown chased after a strategy of diversification that reaccelerated Sonance growth but began to wear down company's brand name with its main customer base. As Sonance's core offering and main revenue source is speakers. The company mainly focused on custom installation dealers who specialize in planning and installing electronic systems for luxury homes. In the time of construction boom, in between 2000 to 2004, Brown took Sonance directly to the production home developers and the mass market consumers such as Big Buy and Lowe's. This increased the custom installers but the company lost its brand identity for going into mass market without proper product development and distribution strategies. This is because by shifting to retail customers, the high-end brand appeal is reduced to high-end dealers and the company becomes dependent in individual customers. By this act the overall revenue of the company decreased from $53 million in 2003 to $47 million in 2004 and Sonance lost almost 50% of its dealers and 12.14% overall revenue. The revenue stream has changed from above 92% to less than 50% concentration on dealers but balancing the concentration on retail and housing productions. Furthermore, the Sonance faces more problems as SpeakerCraft has taken advantage of Sonance's dealer channel by cutting 25% on price, combined with lower installation cost and time which erodes Sonance's dealer channel as dealers will obviously take the lower price. Sonance has various types of customers such as retail customers, new homeowner customers and high-end premium customers. Retail or mass market customers are basically concerned with best product but lowest price and easier to install products. Typically the products targeted to these types of customers are do-it-yourself. The next target customers are moreover price sensitive and they purchase Sonance products as the suggestion of the builders. Finally for the premium customer's price is not an option as long as the product is innovative and has a high visual value. The biggest competitor of Sonance is Nortek, whom increased their market share by acquiring Niles, Elan and SpeakerCraft and they have expanded all of their markets where Sonance is competing. Nortek enjoys a healthy economy by acquisitions and able to offer the highest margins to the dealers in the market. Sonance most valued collaborators are custom installers and builders. Custom installers want the highest margins while looking at the product exclusiveness and also loyal to particular product or