Home Warranty Industry Analysis Paper

Since the early 1990s, the players in the market have copied each other's innovations and this has led to very little differentiation of products in the market. Customers in this industry are very price sensitive and little differentiation allows them to shop around for the best deal. In businesses, there was also a trend towards contracts with multiple suppliers and this further increased customer power. These factors combined have led to lower industry attractiveness since 1990.

Competitors: Our primary competitor is Heinz 57. They have a market share of 16%. The secondary competitors of our business are private labels. They have a market share of 14%. The rest of the competitors towards our company make up the 16% of the market share. A new rising competitor is Lawry’s with new product, steak sauce.

3. Describe at least 3 nonprice competition strategies a company could use to convince customers that its product is better than other similar products. Why would those strategies matter to customers? (1-6 sentences. 3.0 points)

There is absolutely no doubt that we are facing a serious economic downturn that is threatening the existence of many businesses here in the United States as well as abroad. Many companies much like Home Depot are formulating ideas on how to deal with price elasticity of demand or the lack there of (inelasticity). Price elasticity of demand refers to the measure of consumer response to the quantity of demand for products or services to price adjustments. The formula for price elasticity of demand is: (% change in quantity demanded)/ (% change in price), the latter is inelasticity in which is some the issues Home Depot is facing today. The supply and demand graph (See figure 4) indicates the price elasticity of demand for Home Depot: This is an example of a positive price elasticity of demand curve. Should the blue "S" supply line curve slightly to the right that would represent an inelastic supply and demand. The price elasticity graph (economagic.com) illustrates the predicament of many businesses today (University of Aberdeen, 2009).

availability of substitutes, and justify how you determine the price elasticity of demand for your firm’s product. b) Explain the factors that affect consumer responsiveness to price changes for this product, using the concept of price

Firms have developed ways to influence consumer demand which effect supply, one such technique is demarketing or the process of reducing consumer demand for a product to a level that the firm can reasonably supply.

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

However, in addition to the issues mentioned in the sales plan, there are several other components that should be considered. For instance, Stretch ‘r Wings should address the external environment of the product been marketed. The company should also evaluate threats to revenue growth and the opportunities for expansion. In addition to the competitor product evaluation, the company should also be aware of the competitor’s actions such as changes in technology or possible cost

Based on the above description, forms of elasticity will affect business decisions and pricing strategies differently depending on the nature and type of products or services being offered. Business organizations whose product offerings have elastic and perfectly elastic price elasticities of demand should not attempt to raise prices of their products because it will cause the quantity demanded and consequently total revenues to drop drastically. Businesses can there use the price elasticities of demand to determine whether the proposed changes in their prices will raise or reduce their total revenue. The following expression may be useful in helping business organizations to determine the impacts of elasticities on their total revenues based on the suggested price changes.

Competitive analysis is an important part of your business plan, there are a lot of different alternatives in the market, costumers usually look for different sets of values to focus on, benefit levels and what does the item include when they are choosing where to buy the product from. Even though costumers usually choose similar products to those alternatives, and that’s where competition is created.

Competition has became evident and essential in the market of the world’s most important companies. It has allowed consumers to receive ultimate value from the goods and services that they are seeking. In my case study this competition is between two companies that produce ponchos for the fashion industry. The company that we are introduced with is named Tela and their running mate, Saira, is the Goliath of this market. Tela is trying to stay afloat and gain more customers as the underdog. Their plan to reach out to prospective customers is to introduce their new marketing strategy. This strategy includes Tela’s new mission statement which would make consumers aware of their core values and advantages over the Saira. Tela is owned by

The threat of substitutes is the availability of a product that the consumer can purchase instead of the industry’s product (Free management books, n,d ). A substitute product is a product that produced by other industry and offer similar benefits to the customer as the product produced by the firms within the industry. The threat of substitutes can affect the competitive environment for the firm in that industry and also influence the profitability of the industry. This threat affects profitability of the industry because the consumers can choose to purchase similar product from other industry to instead of the company’s product. Besides that, the more the close substitute product can make the industry more competitive and decrease the profit potential of the firm in the industry whereas the less the close substitute product can make the industry less competitive and

There are countless factors that can affect my company’s competitive success and overall market share. There is only one other competitor who is also targeting the same market as my company and who maintains a higher market share than me. The supplies and parts for my product are relatively expensive because my customers want a high quality product that is appealing to the high and is the best on the market. Obviously as a result of this the production costs are high meaning the product itself will have to be priced high. My competition is one other company, we are selling the same product with only slight differences, and those differences are what set our two companies apart and will hopefully allow my company to take over the market. I have spent a lot of money on advertising, which will hopefully raise awareness to my brand new product and bring sales in. It will be an issue that TouchCore will need to overcome, the fact that the competitors product is so close in most aspects to ours, but our prices are different, I set a lower price than the competitor originally in order to try to sell more. However this might have backfired seeing as though the target market is more concerned with a higher quality product and less with the price, so they might have thought that since my price was lower it was of lesser quality and ultimately value. For this reason, in the following Quarter I have raised my prices, as well as giving a rebate, in order to show the consumers that my new

Porter’s Five Forces model is used to evaluate the degree of rivalry between competitors in a given industry through assessing the four forces that lead to this outcome. These forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products.

Knowing who your competitors are, and what they are offering, can help you to make your products, services and marketing stand out. It will enable you to set your prices competitively and help you to respond to rival marketing campaigns with your own initiatives. You can use this knowledge to create marketing strategies that take advantage of your competitors ' weaknesses, and improve your own business performance. You can also assess any threats posed by both new entrants to your market and current competitors. This knowledge will help you to be realistic about how successful you can be.