Strategy Management Hk Jewellery Industry

Price elasticity is an important concept to understand when beginning and maintaining a business that distributes goods or services. Elasticity is the economic concept that estimates when products should be introduced to consumers, and how (provided that all other variables remain constant) demand or supply will be affected by changes in the environment that affect price (Basic Economics, 2007-2010). Depending on how the percentage demanded/supplied is affected by price differentiation will determine whether or not a good or service is considerably elastic or inelastic, providing a sound guideline for business owners. The higher the elasticity, the more the demand will change if the price varies in the competitive market. Elasticity

An industry product can be substituted by a substitute product which has the same or similar function by a different means. A substitute can limit industry profitability and growth. Porter (2008) gives several key elements on determining the threat.

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

In a monopolistically competitive industry, the goods sold, while not perfect substitutes, can be viewed as acceptable substitutes by most people. As a result, if Firm A raised the price of its good substantially, consumers would decrease the quantity demanded from Firm A and would move to other firms selling similar products. As a result, Firm A would sell few units at the new higher price. As the quantity a firm sells falls, so does its percentage of sales in the industry, also

An example of where substitutions readily exist and can affect the elasticity of the market is laundry soap. There are more than 40 laundry soaps on the market. If there is a fluctuation in price where the purchaser feels their normal brand is getting too expensive or not available, they would be more apt to choosing another brand as basically all laundry soap has the same major ingredients, performs the same function, and seen as an easy choice when the price difference can mean a number of

If a good in itself is available and on the pricey side the consumer in today’s society will look for a substitute that complements the budget, therefore creating a competitive market. A competitive market begins when the substitute for the good is marketed at a lower price and the sale of this product begins to increase. When the supply and demand for the substitutions become larger the manufacturer will adjust the costs of the original good to increase sales of the product. If the consumer notices that there was a particular reduction of the good or it can be purchased in a larger quantity of a more reasonable price, then the consumer will change back to the original product at hand. Therefore lending a hand in creating today’s society of price elasticity.

TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY3 2.0 INTRODUCTION3 2.1 Background to Organization3 3.0 ANALYSIS3 3.1 Porters 5 Forces (Model of Competition)3 3.2 PESTEL (External Analysis)5 3.3 SWOT6 4.0 KEY FINDINGS OF ANALYSIS/PROBLEM IDENTIFICATION/ KEY STRATEGIC CONCERNS6 4.1 Vertical Integration6 4.2 Diversification7 5.0 POSSIBLE SOLUTIONS & STRATEGIES.8 7.0 CONCLUSION9 8.0 APPENDICES11 Appendix 1: Porters 5 Forces11 Appendix 3: Luxury Goods Group & Brands Top Ten Competitors13 Appendix 4: Industry Map*.14 Appendix 5: Financial Performance14 Appendix 6: PESTLE Analysis15 Appendix 7: SWOT Analysis16 Appendix 8: Evaluating industry Attractiveness and Competitive strength19 Appendix 9: A Nine Cell Industry Attractiveness-Competitive Matrix20

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.

Louis Vuitton Moet Hennessy, a luxury goods provider is looking to expand their brand dominance in Asia. In order to expand successfully LVMH must evaluate challenges that may arise and get in the way of their successful expansion. In the Asian market, LVMH must deal with political and cultural uncertainties, the threat of counterfeit products, and the increased cost of products in Asia compared to France.

Substitutes: Other means and sources for the same products, services, or information as your Website provides. As more substitutes become available, the demand will become more elastic since the customers have more alternative. When the demand is affected by the change of substitutes price, the threats of substitutes will exist.

The last problem we highlighted concerns how to increase the number of customers in the mainland China market . First, we believe that the most relevant issue is a survey amongst customers on the Shanghai Tang brand perception and the 5 luxury brands in their top-of-mind, in order to analyze the competitors that the company has to face in the future.

Luxury product sales boost in the emerging marketing like China, which has extraordinary growth and strong potential consumers for the development of luxury goods in the China market. With gradually lower and lower increase of revenue in the European countries, Louis Vuitton (abridged as LV in the following sections) commits itself to set up more stores in China. However, LV is faced with the problems of declining profits in China, which urges it to adjust its entry strategy into the China market. In this case, this report will focus on distinguishing the factors that influence LV’s development in China and

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

An example of availability of substitutes is bottled water. Because there are so many brands of bottled water on the market, it makes it very easy for consumers to switch to another brand if the price changes on the brand they normally purchase. With the many brands available, the demand for this certain brand would surely decrease, decreasing revenue for the company.

In order to further illustrate this management issue, this article investigates into the successful competitive positioning of a leading Hong Kong imported food and daily necessity retailer, the 759 Store 阿信屋. Despite 759 Store has a diversified range of business, this article focuses on