How much of the control is in the hands of existing players of the market or key resources? The switching costs are high, so customers would somewhat drawback with fear from moving to a new firm leaving the reliable one. This is a heavily regulated industry. 4. Threat of substitutes Low threat of the substitutes as it is determined by the three factors in the industry which are brand loyalty of the customers, switching costs and the belief in effectiveness of new products/ services.
Different contenders for the procurement At the point when Videocon entered the race for the shading picture tubes fabricating limit of Thomson SA in November 2004, there were 16 different bidders. Videocon stood horrible odds given the way that it needed to fight it out with players like LG, Philips, Samsung and Matsushita, Daewoo and a few Chinese producers yet at long last figured out how to finalize the negotiations. The arrangement slung Videocon into the No. 3 opening in the worldwide pecking request for CPTs. An authority of Videocon said on the arrangement "pretty much everyone knows by now on the planet that India and Indian organizations are a decent wagered independent from anyone else, as well as a fence against China.
Traditionally, price differentiates all products in the market. If the firm is unable to use price as the differentiator for its product, then the firm has to find other means of differentiation. Intense competition has left firms with no other alternatives, but to innovate, in order to stay in business and obtaining competitive advantage. (Westland, 2008) Freeman and Soete (1997) suggest that firms can turn to alternative options or strategies, which help firms to innovate and survive with the changing world science and technology. These strategies involve a variety of different combinations of using resources, scientific and technical skills; forming alliances; licensing innovations; attempts technology and market forecasting; and attempts to develop a variety of new products and processes on their own.
Often, profitable industries with attractive long term strategic mode and low barriers to enter are attractive to new companies. Such barriers will be determined by the economics of the industry of the market, are usually high when there is patents and proprietary knowledge access to specialized technology or infrastructure is required and high initial investment is needed (Martin, 2014). Thus it is important to address the questions of likelihood of the increased competition with the new entrants. Here the importance is what are the barriers, how much would it cost the entrant to enter the market and how quickly would this investment pay back (Strategywrap,
Once again there are a number of factors and characterise that can be used to determine the overall threat of new entrants. The two aspects that determine the threat of new entry are barriers to entry and the attractiveness and potential growth of the industry. Based on these we conducted the following analysis: Increase Threat of entrants: Market Growth: in 2008 the industry did report record sales, some potential entrants may have decided to make a move at this stage and could potentially be launching a product in the near future. Decrease threat of new entrants: • Entry Barriers are high: Entry barriers to the console industry are high. The main reasons for this are: o There are sizeable economies of scale in production of video game consoles o Brand preference and customer loyalty is high o Large capital and resource requirements are needed o Cost and resource disadvantages associated with learning curve o Industry members have the resources and capabilities to launch attacks against any potential new comer to the
Rapid growth in demand has been experienced from developing markets with large populations such as China and Brazil. As a result of increased international sales, co-production has increased significantly. An Increased demand in international sales and increased potential profits has resulted in an increased number of production companies entering the UK market. While the USA is the biggest consumer of UK TV programs, it has different market dynamics such as that all US states have different time zones and that there are hundreds of TV channels available in the American market. Channel entry into the market is easy and there are no controls on the quality of the channel feed nor the quality of the program therefore it is easier to sell and market TV programs in the USA because of the larger market.
Differentiation seeks to develop a competitive advantage by supplying and promoting unique products. While telecommunications is not very unique, not every other business can be able to offer the same services. In addition, competition remains limited due to the cost of market entry. Cost of leadership focuses on reduction of operating costs in order to reduce product prices. Verizon wireless does not require reducing its operating costs further because its prices are already competitive enough.
Due to sheer competition consumer is not willing to pay more than what he feels the worth of the product. Due to intense capitalistic nature of North American market, consumer is filled with number of options and the retailer has no option to switch the prices above its worth. Buyers are being provided with diversified range of products and also the customized products as per their requirement. There is large availability of local and international brands and thus bargaining power is high for the buyer, Key is to maintain the quality with price
Horizontal: This type of products is differentiated based on a single characteristic, but consumers are not clear on which product is of higher and sophisticated quality. 3. Vertical: These products are differentiated based on single features and consumers are clear on which product is of higher quality. • SCOPE OF DIFFERENTIATION STRATEGY: 1. Creates value: When a company uses a differentiation strategy that focuses on the cost value of the product versus other similar products on the market, it creates a real value among consumers and potential customers.
2. The second option would be to compromise on the sales margin and launch the product at a competitive price of $375. Here also the problem is customer oriented. Though the price of $375 would lead to increase in market share, but then the company would have to incur losses and it would be difficult to sustain them for a longer period of time. Also, that would put the burden on the company to produce a high quality product and launch it in the near future, so that they can charge a premium on it in order to cover up the losses.