Kathmandu Holdings Limited Syndicate Case Study Report S2 2010 Executive Summary Kathmandu Holdings Limited (KMD) is a renowned specialist in quality clothing and equipment for travel and outdoor adventure in New Zealand and Australia, operating 97 stores across New Zealand, Australia and the United Kingdom. KMD commenced trading on the Australian and New Zealand Stock Exchanges in November 2009. This report will commence with an overview of the external and internal environments in which KMD operates and based on this overview, key strengths, weaknesses, opportunities and threats can be identified. Subsequently, extensive stakeholder analysis will then be conducted to determine each of KMD’s stakeholders’ specific …show more content…
Competitors include BCF, Ray’s Outdoor, The North Face, and Columbia. The major threats in the industry environment are detailed below: The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms. The Intensity of Rivalry among Competitors in an Industry (High): Equally balanced competitors exist within the industry such as BCF and KMD; these firms also face competition from retailers and wholesalers. The growth of the industry is relatively agile in both financial and technological aspects. The intensity or rivalry is further accentuated by relatively high storage and fixed rental costs, extensive product differentiation and minimal switching costs. 1.2 Internal Environment To provide quality products to a broad market at a range of price points This valuable capability provides greater choice to customers and exploits Australians and New Zealander’s pursuit for an active lifestyle. It is difficult to imitate KMD’s strong supplier relationships and furthermore, the GORE-TEX license guarantees
The monopolistic rivalry business structure incorporates numerous organizations offering somewhat separated items. There is a simple passage into the business sector by new firms over the long haul, and the organizations are sufficiently extensive to impact the aggregate supply. There are likewise various measurements of rivalry, including dissemination outlets, promoting, and item characteristics. The peripheral expense will be not exactly the cost at its benefit amplifying yield level. As indicated by the content, a monopolistic contender can't make long-run benefit (Colander, 2013).
First and foremost, competitive rivalry describes the intensity of competition between existing firms in an industry. In the fresh food industry, the intensity of rivalry is influenced by different characteristics. Price
Rivalry among existing competitors describes the intensity of competition between “Broadway’s Café” and existing coffee shops in an industry. A highly competitive industry might result from many players of about the same size, on single dominant competitor, little differentiation between competitors’ products and services
Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.
The bargaining power of buyers stands in a direct relationship with the bargaining power of suppliers. If the bargaining power of buyers is substantial it increases the opportunity cost of suppliers. The greater the buyers concentration the greater their bargaining power. This bargaining power is also increased in markets where the suppliers’ concentration is high. The bargaining power is also increased when the cost of switching from one supplier to another is low. In instances where backward vertical integration is possible i.e. buyers setting up their own chains of suppliers the bargaining power of the buyer increases in that their prices may become more competitive. In a market where the buyers are more concerned over quality than price their bargaining power decreases as they are less inclined to shop
Industry Rivalry is high:- Due to continuously increase in demand since 2008, Industry rivalry is high. Price competitiveness drive rivalry. Availability of other international brands, no such barriers on new entrants ad continuous growth in demand of athletic goods pushes price competitiveness. So we can easily say that industry rivalry is high.
Industry Rivalry: Intense (high). As there is low entry barriers in the industry, it adds more competitors/rivalry.
The supplier bargaining power depends on the importance of volume, level of supplier uniqueness and threat of forward integration. The supplier’s power is high in term of unique product, less product differentiation and high threat of forwards integration, affecting their customer’s ability to acquire profitability (Porter, 1980). However, large firm like Chloe and Hermes international, accrued the power and the capital to pose a threat for forward integration by owning their own channel of distribution, giving opportunities to achieve high market share thus being strong competitors for other suppliers. In contrast, for new entrants, as a result of the high fragmentation of small scale suppliers, achieving economic
Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high
| * A wide variety of other substitute to choose from * The popularity of indoor activities
Industries in the new era tend to concentrate on linking with other corporations on a geographic level, to bring in all their forces together to create a highly technical & cost effective collaboration. This collaboration also involves joining forces with the suppliers across the product development cycle for easy access & faster processing of the products. This also ensures quick access to markets, lower product cost & better quality. Attaining successful suppliers results in success of the company & enhances its overall performance. It isn’t easy for a company to recognize if the suppliers they choose are capable of supporting their new product development or hinder their growth & effect the company’s performance. Companies need to be able to identify if the supplier integration during the product development phase has negative or positive effects on the technological risks & uncertainty. They need to choose the right decision for their company. Suppliers provide materials & services to an organization based on the new product requirements. The product or services provided by the suppliers may not be of a greater quality, determining this is the major job of a company. Since there might be chances that the supplier will have a better knowledge about the products than the companies, companies need to be cautious about it. Compromise on cost can be done but
Competitive markets means strong rivalry amongst firms or companies which are trying to achieve and outdo each others by increasing their market share, profits and sales by using the methods of marketing mix which includes prices, products, distributions and promotions. It can also be described as a spectrum of a purely monopolistic, in which a company is the sole producer of good and services, this means that a sufficient number of firms or companies are relatively equal to their sizes, which eventually none of the big competitive companies can influence the market in any way.
The extent of rivalry depends on four factors. The first is the competitive structure which means that rivalry is determined by the number and size distribution of companies in its industry. Each composed of different numbers and sizes. It is comparable to that of a pyramid; there are more fragmented small and medium businesses on the very bottom. Above that are a small number of large companies and at the very top there is a monopoly (Hill & Jones, 2008).
The whole King Car Group where Kavalan whisky distillery belongs needs to retool every sphere of its business group– from the culture of the organization to its operation management and corporate governance formation – to install the community strategy within. KCD has not developed as a community - based element to firm the connection between the company and its customers. For internal stakeholders such as employees, the habitual and adjoining connection with the targeted customers could accumulate meanings to their service. For instance, cooperate with local hotels to introduce a designated weekly whisky night, served with Kavalan whisky, traditional Ilan cuisine and live music. Educate KCD’s employees to be more knowledge and appreciate ‘the liquid of