Frequent acquisitions and mergers due to numerous recessions have allowed large companies to grow and enter new market segments. Lastly, mini-mill producers used to only produce niche products for a selected market. Today, however, they now operate and compete on a much broader scale. A high threat of new entrants also complements extremely high competitive rivalry. Industry consolidation in both the United States and around the world has resulted in numerous acquisitions and mergers.
Threat of the new entrants: Industry with higher returns would attract many new entrants which would increase the competition and reduce the profitability of existing players. In this sector margins were very high with Calyx &
Strong market position allows the company to launch new products and also increases its bargaining power in the market. However, the high transportation cost resulting from the higher oil prices has increased PepsiCo’s shipping and handling cost from $4.1 billion in 2005 to $5.1 billion in 2007. Given the intense competition in the market, the company may not be able to pass on increases in operating costs to its customers. High oil prices would adversely affect the margins of the company. Page 1 of 2 PepsiCo SWOT Analysis Strengths, Weaknesses, Opportunities and Threats (SWOT) Location of Factor TYPE OF FACTOR Favorable Internal Strengths Unfavorable Weaknesses Strong market
Alternatives a. Implement the corporate branding strategy Pros: Increase customers acknowledge of the brand Rosewood; increase the number of properties visited by customers as well as the cross-selling rate; serve a broader range of customer; increase overall revenue; enhance its competitively Cons: increase of marketing cost as well as other operating cost such as change the logo on everything; some brands may lose their exclusivity and the emotion links and thus losing certain customers; raise the internal conflicts among mangers of the individual brands and the board; it increases the
Routine outcomes of having such a long lead time, however, include stockouts of popular items during peak selling periods, and leftover stock of unpopular items which ultimately are sold at below-cost rates. Where the firm could find opportunities is in stimulating demand through an aggressive marketing campaign. While such a campaign would exacerbate the firm’s stockouts of popular items, it would aid in selling overstocked items at still-profitable prices. Another serious consideration for Sport Obermeyer is expanding abroad. Today the company sells products in the United States, Great Britain, and Canada.
Further increase in product line both in terms of high price and product variety, to attract a large range of customers, can affect their lean operating model increasing inventory costs. Increasing customization options could also affect its competitive pricing increasing operation costs. Even though outsourcing operations and services can help keep a better control but in times of high demand they can be compromised since they are not directly a part of the company. The quality of the service is dependent on the ability of the outsourcing company and not Blue Nile. Further, it set lower gross profit margins on high value sales (just to make the sale)
It influences the extent to which the value created by an industry will be dispersed through direct competition. There were several signs of industry growth at the time as was USA’s economy; this led to a number of newly emerging discount stores trying to exploit the potential of high profit. This led to intense competition at the time and increasing rivalry for market share. Due to this industry concentration was low at the time. There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry.
These prices are what the advertisers pay for an “impression,” or moment of viewing (Stahl 4). These CPM prices generate ad revenue for TFC. TFC’s competitors obtained premium CPM and were taking away ad buys from TFC which resulted in skimming away TFC’s ad revenues. One of the underlying reasons why this happened is because competitors were attracting more viewers by creating strong programming blocks. These blocks were gaining notable ratings among viewers.
The significance of these fluctuations impacts the balance of the territories, making virtually more lucrative than others which will generally lead to objurgation and complaints to management from the disadvantaged salespersons. Furthermore the disadvantage extends in that the control units with the higher number of employees will require much more effort to turn potential customers into customers and to adequately support them
The case can be seen in accordance with the change theory as follows: Trigger • Wide variation in profits across various regions. • Highly profitable regions were sometimes using lower-quality items, even seconds, to boost profit margins. • National distributors were pushing hard to increase market share by cutting prices and launching new products. Target • Regional centers as they need to follow a standardized model. • Organization’s management practice from autonomous to centrally controlled style.