Tiffany Case Study

The large initial capital investment needed for new entrants is another major barrier. The cost of machinery and manufacturing is expensive. It is hugely important and costly to have a global presence in manufacturing as it is extremely expensive to ship machinery to clients around the globe.

Currently, the Potential for New Entrants is moderate. The reason the potential is moderate is because the Jewelry business is an expensive business to get started into. Since most of the

Bargaining Power of Buyers: The bargaining power of buyers is high in the department store retail industry. The volume of buyers is high, and buyers are very price sensitive in this industry. The products are not highly differentiated, and there are numerous stores that offer the same, or similar, products, giving buyers the opportunity to search for the lowest prices and information. The industry has substitutes available in the form of specialty, differentiated products and stores. This increases the power of buyers,

The retail industry is saturated with substitutes, in part to low entry barriers. Online shopping and small boutiques stocking similar lines, brand names and designs provide David Jones potential customers with many substitutes. It is the David Jones experience that cannot be substituted; shopping in a large, upmarket department store. For the sector, substitutes are low.

Bargaining power of buyers is medium-high because of the low switching costs and wider spectrum of similar products selling at competitive prices due to the influence of developing countries

This has hurt negotiations with current buyers, causing gross margins to slip due to the aggressive competition. Being known for quality is important, but the brands creating cheaper replicas, artifacts, and jewelry still have a place in the market.

the year 2050. Population growth at an overwhelming rate can cause many effects on a

The intensity of rivalry and the threat of substitutes are strong components for J.C. Penney to consider as they continue to strive for increased revenue and market share. Their two primary competitors are Macy’s and Kohl’s, both of whom have fiercely competitive strategies to be strong retail operations. For instance, while Macy’s offers a multitude of promotional deals and is working hard to choose products based upon demographics and geographic segmentation, Kohl’s is attempting to reduce their inventory levels and improve their marketing strategies in order to become a stronger competitor in the department store segment of the retail industry. In order to compete with their competitors, J.C. Penney aims to focus on their previously successful promotions and home department segmentations by bringing in new reputable designers in order to attract a larger customer base. Due to the fact that the intensity of rivalry and threat of substitutes are both moderately strong in the retail department store industry, J.C. Penney ought to be diligent in their implementation of strategies in order to achieve success in the retail business.

Buyers pose a credible threat of backward integration. pg. 218 (e.g. one of Holey Soles distributors had set up its own company and was selling poor versions of the shoes.). Hence it’s a possible threat in the industry. Medium to High.

Foxy Originals hopes to gain successful market entry into the United States within six months. The U.S. market is significantly larger than the Canadian market that Foxy currently operates in and has substantially less brand loyalty and demand for classic jewelry. Foxy’s two potential methods of market entry are: (1) Tour their products at ten U.S trade shows and make direct sales to retailers or (2) Hire four sales representatives in fashion hubs across the U.S. We, Vandelay Industries, recommend Foxy implement the first alternative.

The bargaining power of suppliers for raw materials is low, while for facilities is high.

regulation, cost and availability of raw materials, and cost of labor. A business may have the best idea for

If suppliers are limited, they have a greater opportunity to charge higher prices for raw materials, and they may also pose a threat of forward integration to the industry.  Similarly, if an industry has few buyers, or buyers can cheaply and easily change suppliers, they can make demands for less expensive higher quality products, causing impact to profit (Porter, 2008, p. 83).

Power of the Buyers - There is a high power because of the other low-price furniture. Consumers have other alternative choices among its competitors.

Threat of substitute product is low because consumer cannot use iron or wood (high cost) instead of steel because of low performance and if they will use good metal than steel it would be costly for them.