Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers. Corporate stakes were high for Wal-Mart, this can be seen in its earlier years (Ben Franklin stores) where they were losing
Blue Nile, Inc. (Case Study) Submitted by A-Game 1. Five Forces Analysis Overall, the competitive forces on the industry are only moderately strong with rivalry competition having the biggest impact. The five forces are looked at individually below. Buyer Bargaining Power Buyer bargaining power is low, but growing in the online jewelry retail industry. The increasing power stems from the buyer’s switching costs to competing brands being extremely low.
It didn’t help that a lot of their online competitors copied BN’s method of buying gemstones from their suppliers for specific purchases. New Entrants: This is a weak force. When looking at the high costs to enter, as well the significant brand loyalties that already exist, the competition for new entrants keeps most new entrants from being successful. Buyers: This is only a moderate force, since jewelry tends to be custom, and therefore, people expect to pay higher prices than they might for other things. Most jewelry stores’ prices aren’t greatly different from others’ and buyers have very little influence on prices due to the high cost of raw materials to make the products.
Oumou Toure Case study 5: Under Armour January 25th 2015 Under Armour Case Analysis After reading the case, I came up with the analysis on the porter’s five competitive forces; Under Armour has a medium to high intensity of competitive rivalry within the industry. The bargaining power of customer has an intensity of medium; the treat of new and potential competitors is medium. The bargaining power of suppliers is very low to medium and last one; the threat of substitute product is low. Under armor does not carry patent rights however, Nike and Adidas do have patent rights. For that reason, Under Armour apparels can be copied very easily, which is not a good image for the company.
Laura Ashley is a global clothing and furnishings retailer based in the United Kingdom. They had grown at a very fast rate from operating 231 retail stores in 1986 to 481 stores in 1990. Unfortunately, its profits were not increasing as expected due to the inefficiency of its logistics management. Overall, it could be considered that the company grew too fast and without the infrastructure to support the growth. Information technology investment was also considered to lag behind the level that was required to initially support the growth and also to support the company in their ongoing global operations.
Also the absolute cost advantage for early entrants as new entrants will have to incur high cost in a plant, advertising, or R&D. Another important reason is the vertical integration as CPs acquire or own a percentage of bottling companies which gives them the advantage of controlling the bottling network and makes it very hard for new entrants to find bottlers for themselves. Rivalry, competition is concentrated with the top two players holding a total of 71.8% of market share (in 2009, Exhibit2), thus, leaving very small room for other competitors. Bargaining power of buyers is somewhat low and depends on the type of the buyer. For example, supermarket channel is fragmented and thus didn’t have much of a bargaining power.
The company had stores on every corner, which resulted in high costs. Once the industry started evolving with new technologies, these stores became sunk costs for the retailer. Online-only retailers who enjoyed much lower costs than the brick and mortar stores were able to profitably charge customers a lower rate; however, at the same time, Blockbuster Video was saddled with the high costs of labor as well as the physical stores. It was not long before Blockbuster’s costs became too much for the retailer, as they were forced into bankruptcy. Today’s market landscape looks much differently than it did when Blockbuster Video was at its peak.
Ms. Lovely Acompañado has extensive experience in sales, marketing and management, and was vice president of marketing with LoveVa Shoes Company. Ms. Naeva Kelsey Grajo brings experience in the area of finance and administration, including a stint as shoe financial officer with the national flip flop store chain. LyNae foot wear is a start up- foot ware establishment located in Southwest Washington. LyNae expects to catch the interest of a regular loyal customer base with it’s broad variety of foot wear products. The company plans to build a strong market position in the town, due to the partner’s industry experience and mild competitive climate in the area.
Such economies of scale will allow Berkshire to offset the very high costs of cold-forming equipment. Business StrategyA careful analysis is needed in order to determine Berkshire’s business strategy. At first one would think it was product differentiation because of the inelastic demand in the short run. But one thing that should also be noted is the fact that for most goods, demand is much more price elastic in the long run than in the short run. This combined with the fact that Berkshire is convinced that it could not individually raise prices without suffering substantial volume declines, and that all the products of the different manufacturers in the industry are very similar, prove that their business strategy is in fact cost leadership.
E) a small percentage of companies in the industry are currently earning above-average profits, entry barriers are high, and buyers are not brand loyal. 7 INCORRECT Which of the following conditions generally raise the barriers to entering an industry? A) Low levels of brand loyalty on the part of customers and the presence of more than 20 rivals in the industry B) Rapid market growth, low buyer switching costs, and weak brand preferences and customer loyalty C) Product offerings that are pretty much standardized from rival to rival D) High capital requirements, difficulties in building a network of distributors-retailers and securing adequate space on retailers' shelves, and the likelihood that industry incumbents will strongly contest the efforts of new entrants to gain a market foothold E) The industry is not characterized by scale economies and/or sizable learning/experience curve effects and few firms in the industry hold key patents and/or possess significant proprietary technology not readily available to a