According to Drucker, P. “Efficiency is doing better what is already being done.” (Halford, 2009) This has a positive notion of being efficient which outclasses a task which has been completed. Pokka is doing better than what it is already done by procuring the number of their retailer’s sales, enabling them to monitor their production level and set their prices for decision making purposes. Bargaining power of customers This is an excellent technique used by the customers to receive cheap prices when they make bulk purchases. As mentioned before, Pokka distribute to larger retailers such as hypermarkets and supermarkets, the demand would be high as the consumers are most likely to be bulk purchasers. In the market, everything which is essential faces the pros and cons.
This part of the paper will mainly focus on two of P&G’s one billion dollar brands, Pampers and Head & Shoulders. The businesses belong to two different segments, but are both included under P&G. An analysis of how P&G strengthen their businesses, uses their resources and how and if the businesses add additional value to the whole firm, will be discussed in the following part. 4.1. Pampers - innovation and customer understanding Pampers is P&G’s biggest global brand, used by 25 million babies in about 100 different countries.
These forces are namely; bargaining power of suppliers, Threat of New entrants, Threat of Substitute products or services, bargaining power of buyers and Industry Rivalry (Grundy 2006). a. Bargaining power of suppliers Due to the surplus availability of suppliers in the sporting goods industry, the bargaining power of suppliers is a weak one. As such Adidas can exert full control over its suppliers and get good value for their supplies thereby influencing the cost of production (brightkite.org). Also due to its sear size of operation subsequent on large quantity of supplies as such, Adidas will be able to negotiate for better deals.
The influence of rivalry is high if competitors are equal in size and power, barriers to exit are far above the ground, and growth of the industry is near to the ground. The price competition transfer profits from industry to customers that is why rivalry is destructive to profitability. Price competition occurs when the switching cost for buyer is low and product or service are almost same, marginal cost is low and fixed cost is high, capacity must be efficient, and product is perishable. Profitability can be less affected by the brand image or timely delivery as compare to price competition. Zero-sum competition is when all the competitors are focusing on same attributes or needs.
There are plenty of suppliers in the market to supply the raw materials to soap producing companies and they compete among each other. As a result of which Nila enjoys the facility to get suppliers providing good quality raw materials at a cheaper rate. So the lucid analysis of the situations says that bargaining power of supplier is very low. 4. Bargaining power of the Buyers The bargaining power of the buyers of our product is high.
Suppliers can reduce supplies quality and increase supplies price. There are the bargaining powers of suppliers lead to high levels of threat when: the supplier’s industry dominated by small number of firms (the firms are small choice for purchase, suppliers can more flexibility to charge high price and reduce quality for increase the supplier’s profit), the suppliers sell unique or highly differentiated products (suppliers can operate in almost whole industry by their unique characteristics of products), the suppliers are not threatened by substitutes, the suppliers threaten forward vertical integration, and the firms are not important customers for
Fligstein explains the four threats to a firm's stability. The first threat is a supplier. THey can control a lot of aspects like “inputs, raise prices, and make firms who require their inputs unprofitable” (17). The second, competitors, engage in price competition. For example Coke and Pepsi, they are both really popular companies and have a wide range of consumers.
This has some external factors affecting it. Some are high number of firms and low switching of costs, both are strongly affected forces on competitive rivalry of Unilever. In such a big market, it’s very easy for a customer to switch to other brand. For that purpose low switching of prices have a very strong effect on their market value. Thus, in the case of Unilever the competitive rivalry is strongly
In my opinion I think that David jones targets a vast amount of their products towards those with a disposable income. David Jones would target those from ages 18-65, as those are likely to have jobs with a reasonable income to afford the company’s products. The items that David Jones sell is those of reasonably high end brands e.g Chanel, Dior, Versace, etc. They do also offer some mid range brands such as Country Road and MINKPINK. These brands particularly target those with a high income so the prices of their products tend to be more expensive than Target or Big W. These high end brands majority of the time produce a good quality item, leaving the consumer especially the younger ones wanting more.
2. Bargaining power of buyers or customers (moderate force): Cadbury’s buyers are categorized into retailers and consumers, they are spread across the world and are in billions. The increasing number of competitors offering similar products at lower prices might result in customer loyalty alterations and the retailers play a major role as they are directly related with revenue. 3. Bargaining power of suppliers (weak force): As they are large number of suppliers, Cadbury has higher bargaining power than its suppliers as it can buy their raw materials in bulk than any other medium sized