2010) is provided below. 1167872 4 Despite the leading position and the good business results, SWOT shows several sources of potential risks for UST. The company is losing market share against new price-value competitors because of slow innovation and late product introduction and extensions. Historically, UST relied on his leading market position boosting earnings with annual prices increases. But in the meanwhile smaller competitors started to quickly erode market share with prices cut.
Under the high competitive and fast-evolving electronic industry, no change means fall behind. The Financial Report from 1991 to 2000 indicated the sales increased, while the gross profit decreased. It means cost of good sold increased year by year. According to the case, Best Buy offering a self-serve mode rather than pay commissions to sales in order to reduce their SG&A, but Circuit City still kept the same one in its sales model, which resulting in increase the sales cost and declines in operating profit. Also, the worst part of this sales model is to ignore the customer’s needs.
Corporate and Business Strategy: Team Case 2 Date: 3/8/2009 Re: Competitor Analysis: Wal-Mart Company and Dell After a thorough analysis focusing on key strategies of Wal-Mart and Dell, which are outlined in the following pages, our final conclusion is that many of their competitive advantages cannot be easily replicated. However, several of their successful strategies outlined below could be implemented to help make XYZ companies more profitable. Matching Dell Between 1994 and 1998, Dell Computer Corporation grew twice as fast as major competitors in the personal computer market. Dell achieved this feat by successfully implementing the “Direct Model,” a strategy relying on the direct delivery of customized PC’s at a relatively low price. Competitors quickly recognized Dell’s success; however, none were able to successfully restructure their operations to reach the profit levels that Dell achieved.
This move allowed Rayovac to extend their portfolio, and also access new retailers such as Home Depot, and RONA. Ultimately these gains didn’t favor one segment over another instead in gave Spectrum the ability to compete within its given market. The rechargeable batteries market in 2004 represented only 5% of the North American battery market, and 10% of the Canadian market. These percentages are low for several reasons. Consumers are reluctant to purchase the upfront investment of the charger, the high cost per battery relative to alkaline units, and also the lack of knowledge of the new technology by the consumer.
Offer highly innovative and reliable products possessing high quality standards. Sony’s main divisions Sony Electronics Sony ATV Music Publishing Sony Computer Entertainment Sony BMG Music Entertainment SONY Sony DADC Sony Picture Sony Ericsson Sony Shock • Profit margin has dropped from 10% in the 90’s to 1,5% • • today. Failing to take advantage of strategic windows Lost focus on central business: Electronics Question # 1 • Discuss the importance of product innovation to the future success of Sony, with regard to the changing marketing environment? Microenvironment Competitors • Increasing numbers of competitors • Microsoft, Apple, Samsung etc. • Facing high quality competitors offering lower prices Customers • • • • High expectations Lost brand loyalty Higher consumer awareness Homepage, target groups Macroenvironment Social and cultural Technological Economic • High tech-lifestyle • Technology as an identity • A global phenomena • Importance of R&D • Globalization • Upward tendency in spending Importance of product innovation • Focus on
3. Threat of Rivalry Personal Computers and the music/audio market are Apple’s two main areas of competition. Their leading competitors are Dell, HP, and Microsoft. Personal computers are quite popular today and with so many choices, the sales price of the computers need to be lowered to a competitive price which can, again, lead to a loss in profit. However Apple has, because of their easy to use and widely available, fair priced iPod(s), cornered the music market.
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
Blockbuster was able to outspend the competition, which in turn created Barriers to Entry for Rival video stores. All of these forces pushed away Substitutes to Blockbuster like Hollywood Video or Family Video. These smaller video rental chains did not create enough of a rivalry to really hurt Blockbuster until Netflix came along. Blockbuster had loss in the millions and into the billions towards the end of the 90’s and into the beginning of the
Virgin Mobile wants their prices to be competitive, allowing them to make money without triggering off competitive reactions. Situation Analysis At the end of 2001, the U.S. had six national carriers and a number of regional providers. The market was considered to have reached maturity with 130 million subscribers. However, among consumers aged 15 to 19 penetration was around 17%. Consumers aged 15 to 29 had poor credit quality and they were considered to be low users, therefore they were not as attractive to current players.
Similarly income distribution is highly skewed with 20% of the richest Indians sharing more than 40% of the national income. India’s deep suspicion of foreign companies, the preference for national products and the presence of several religious and activist groups are political issues facing McDonald’s. 2) McDonald’s did well in India for a number of reasons. The main reason to their success was that six year period before entering the market after the economic liberalization that made India attractive for foreign direct investments. Rather than rushing into the market they took the time to focus on planning, extensively researching Indian consumer tastes, product developing, and arranging their supply chain before opening their first outlet in 1996.