Q1. What are the Industry’s Dominant Economic Traits? Industry’s Dominant Economic Traits | Features | Questions to answer | Market Size & Growth Rate | U.S is the largest producer of Home appliances in the world. U.S Home appliances industry is in the phase of Maturity. There are four major firms in Home appliances industry in United States. in 2002 there are 74.5 million units. Dollar volume had been growing at an annual average rate of 1.9 percent since. | Scope of Competitive Rivalry | As major home appliance industry became increasingly global it became difficult for global and domestic major home appliance companies to survive independently in the competitive environment. | Number Of Rivals | Major rivals who …show more content…
| Product supplied | Commodity | | 2 | | | | Specialty | Similarities in products so they can easily switch to other if they increase the cost | Switching cost | Low | 1 | | | | | High | Buyers can easily switch to other products if low cost. | Profit earned by buyer | Low | | 2 | | | | High | Company is getting less profit and providing more discount to customers | | | | | | | | | | | | | | | | | Overall Industry attractiveness | | | | | Factors | Unfav | Neutral | Fav | | | | | Entry Barriers | | | * | | | | | | Exit Barriers | * | | | | | | | | Rivalry among existing firms | * | | | | | | | | Power of buyer | | * | | | | | | | Threat of substitutes | | | * | | | | | | Q3. Identify forces likely to exert greatest influence over next 1-3 Years? (Please note the Drivers of change are few usually not more than 4 factors). Your Drivers of change must point out. i. Are driving forces acting to cause demand for product to increase or decrease? The driving forces increase the market demand for product because of emerging
And the customer are sensitive to the price since those products are using only few times and need to be change all the time.
Whirlpool is the world’s largest producer and marketer of small and large home appliances such as mixers, food processors, washing machines, refrigerators, air conditioners, etc. Whirlpool also has a long standing relationship with Sears, which sells Whirlpool products under the brand name Kenmore. In addition to its North American presence (both manufacturing and sales), Whirlpool also has a strong presence in Mexico, and Europe. Being the largest producer in the world has helped Whirlpool to compete on lower costs through economies of scale and through its Global Procurement Organization (GPO). In addition, its large networks also help in
8. Probably covered in the above. Some other forces would include employee wellbeing, customer satisfaction, short vs long term objectives, competitive position.
The most dominant problem addressed in the case that Haier is facing is that it lacks of brand popularity in the global market, comparing to its direct competitors such as Whirlpool, GE appliances, and Electrolux. Even though Haier made its effort to amplify its brand image and popularity globally by making a bid to acquire Maytag Corporation yet did not succeed, it is still difficult for Haier to enter the high-end segment of the US white goods market. According to statistics from Euromonitor, Haier’s 2013 market shares in consumer appliances segment in the North American and Western European markets were 0.9% and 0.5% respectively, which are significantly lower than Whirlpool’s, one of Haier’s major competitors in the U.S. and Europe,
* Buyers try to switch cost because of the same product available at other retail stores.
In the United States the home appliance industry is a mature market with high penetration, therefore, replacement product is significantly important to the industry. The United States has three major manufacturers for domestic production: Whirlpool, General Electric, and Electrolux. The appliance industry is changing rapidly and becoming more competitive with the influence of Asian competitors, specifically, LG Electronics and Samsung Electronics, who are major appliance importers. Subsequently, in January 2016, a Chinese manufacturer, Haier, bid for the purchase of General Electric Appliances, finalizing the contract on June 6, 2016 (Thompson, 2016).
In this instance, consumers would spend a greater amount of time researching the various competing brands before settling on a purchase. Products that fall into this category are computers, hand-phones, refrigerators etc. For me, this would be for skincare. If I had to switch from Brand A to Brand B,
EPS Growth Rate: These values are also found in exhibit 6, leading to g = 5.55%
I am not just another appliance repair technician. I am with you from start to finish. Answering the phone , scheduling appointments, checking in parts, completing the repair, and billing are all done with me. With the correct information I can diagnose most faults over the phone and head out to do a same day repair. If the prediagnosis was inadequate there are nearby parts distributors, so i can reassure you the repair will be done ASAP. Repairs are charged through a job code, not hourly to make sure the job is done swiftly and correctly. There is no charge until the Appliance is repaired or the repair is declined after being properly diagnosed. Having very minimal over head we can charge less than most major appliance companies! I am not
Grant Nauta AHP Case Study Because American Home Products (AHP) currently operates with virtually no debt, their financial risk is very small. This shifts the burden heavily towards business risk. A porter’s five forces analysis is appropriate to determine the exact levels of business risk for American Home Products. First, the threat of substitutes is a risk that AHP cannot afford to ignore. Because they spend very little on Research and Development, and have to rely on their marketing to catch up to competitors, they always seem to be a step behind their competitors. In the industries that AHP operates, switching costs are very low and consumers based on anything from price to overall sentiment. Also, if a competitor markets a product
The threat of substitutes for the Household Products of the Nondurables Industry is high. As mentioned before, each company produces a product that is very similar to its competitors. Customers also have high bargaining power in that they can buy substitute products such as paper towels and disinfecting sprays. If a company does not spend time and effort marketing its products, consumers will not be able to differentiate them from a competitor.
The threat of substitutes is low. Buyers are unlikely to substitute Corning’s product because few substitutes exist. Additionally, switching costs would also be high for business buyers to substitute Corning’s with another manufacturer’s
Focusing on one area instead of trying to offer too many products is becoming a more effective way to market. Companies will start finding niches and then position themselves as the definitive source of information for specific products and services (Gunelius, 2010). When marketing too many products it is easy to dilute the market as well as the benefits of each product. When features overlap consumers not only get confused as to the differences but ultimately pick the cheaper one. So the costs to market the higher priced items become a waste. Focusing on fewer products allows for a more valuable product and therefore more effective marketing techniques.
The strategy for setting a product’s price often has to be changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes its profits on the total product mix. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.
➢ Product differentiation - Products that are relatively the same will compete based on price. Brand identification can reduce rivalry.