Home Appliance Case Study

Q1. What be the applications Dominant sparing Traits? Industrys Dominant Economic Traits Features Questions to answer market place Size & Growth Rate U. S is the largest producer of Home appliances in the world. U. S Home appliances industry is in the phase of Maturity. There argon four major(ip) firms in Home appliances industry in United States. in 2002 there are 74. 5 million units. Dollar volume had been growing at an annual average rate of 1. 9 percent since. Scope of Competitive Rivalry As major class applianceindustry became increasingly global it became difficult for global and domestic majorhome appliancecompanies to survive independently in the competitive environment. itemise Of Rivals Major rivals who shared 99% of themarketshare were Whirlpool,General Electric, and Maytag, AB Electrolux. Others who shared 1% of themarketshare were Bosch-Siemens, Haier, Emerson Electric, Sub-zero, Viking and Wolf. Buyer Needs & Requirements Many consumers were demanding appliances that are attractive, convenient and easy to vacuous for that consumers are go outing to pay top tolls for top of the fine appliances that enhances their decors and save precious time. The manufactures absorb responded to the consumer demands, by manufacture smart appliances with sophisticated electronic controls and self diagnostic features. Pace of Technological Change new(a) technologies and designed were being introduced into major home appliances.Due to governmental pressure, appliance manufactures were introducing energy efficient versions of Home appliances power point of Product Differentiation In US majorhome appliancesindustry firms differentiated themselves on the flat coat of quality and equal. Product Innovation As a result of high competition and rivalry companies were everlastingly in search of innovation. Huge enumerates were being spent on RD in holy effectuate to replace current technologies with more efficient one. For example use of microwave energy in turn dryersso that clothes could be dried faster, at low temperature.This technology was not marketed as it needful further improvement. Another example of innovation is that silent, vibration-free refrigerator instead of the noisy, energy-consuming compressors. The cooling apparatus consisted of wheel containing gadolinium powder moving through a high powdered, rare earth magnet. Economies of Scale All the majorhome appliancemanufacturers were trying to gain economies of scale by renovating and building outpution facilities in order toimprove qualityand reduce material costs. Q2. What kinds of competitive Force are industry members facing? beguile make sure you follow my slides for Porters analysis. You wealthy person to explain the reasons for your evaluation. Threat of New Entrants/ compliance Barriers Factors HUFA MUFA Neutral MFA HFA chin wag Economies of scale Small 4 Large 99% of market shares capture by big four firms. Capital require red let loose 5 lofty The high amount of capital required for the new entrance in this industry Access to distribution channels considerable 2 Restricted There are three mass distribution channel. Which distribute appliances to mass. Differentiation modest 2 High There is no such differentiation in convergences features. Focusing on price reduction that drove the surviving firms to maturationd efficiency and a strong concern for customer gaiety Brand Loyalty Low 5 High A significant fraction of the consumers of high-end appliances were very well-educated about the brands and were also particular about the brands they used. Experience Curve Insignificant 4 Significant They have more than 50 years of experience in appliance industry that was the main source of their success. Govt. perform 4 Govt has put strong regulations on Industry to produce energy saving products. Exit Barriers Factors humming MUA Neutral MA HA Comments Specialized Assets High 1 Low The y have captured a long market through product development, learning experience and RD. Fixed salute of Exit High 2 Low They have spent a huge amount on machinery,labour trainings,RD strategic interrelationship High 2 Low Collaboration and commitment with their suppliers and dealers. Competitive RivalryFactors HUFA MUFA Neutral MFA HFA Comment Composition of Competitors Equal Size 5 Unequal Size All have alike resources and same product line so they can compete easily with each other. Mkt. Growth rate decelerate 5 High Because they have maximum market share and have grap the customers loyalty. Scope of competition global 1 Domestic Because of competition with International markets. Capacity Increase Large 1 Small When they will produce same products as like their competitors so it will exceed the requirements and have to sellin lesser price. stratum of differentiation Commodity 3 High No such product differentiation among rivals Threat Of successor Product Factors HUFA MUFA N MFA HFA Comment Threat of Obsolescence of Industrys product Hi 5 Low Product durability and reliability and no such substitute. Aggressiveness of substitute products in promotion Hi 5 Low There is no threat facing from substitute product permutation Cost Low 5 High No substitute Power Of BuyerFactors HUFA MUFA N MFA HFA Comment Number of Important buyers Few 4 Many Brand loyalty and innovative products preference. Product supplied Commodity 2 Specialty Similarities in products so they can easily switch to other if they increase the cost Switching cost Low 1 High Buyers can easily switch to other products if low cost. avail earned by buyer Low 2 High Company is getting less avail and providing more discount to customers Overall Industry attractiveness Factors Unfav Neutral Fav Entry Barriers * Exit Barriers * Rivalry among actual firms * Power of buyer * Threat of substitutes * Q3. Identify forces likely to exert greatest influence over abutting 1-3 Years? (Please note the Drivers of alter are few usually not more than 4 factors). Your Drivers of change must point out. i. Are driving forces acting to cause demand for product to increase or decrease?The driving forces increase the market demand for product because of emerging technologies, increase in globalization, product innovation and customers demand. ii. Are driving forces acting to make competition more or less screaming(prenominal)? Competition increases because the existing firm more involved in product innovation, price reduction and globalization. iii. entrust driving forces lead to higher or lower industry profitability? Their profitability will increase because of mass production, change in cost, efficiency, change in peoples life style. Q4. Develop strategical group map for the industry.Justify your reasons? Price Highlow Maytag AB Electrolux Gene ral Electric Whirlpool Few models Many models case Variety Q5. What are the key Factors for competitive success? Develop competitive profile matrix. Common Types of Industry Key Success Factors (KSF) Features Questions to answer Technology Introduce energy saving products, customers oriented features and efficient products that have save their cost and time. Manufacturing Related KSF Economies of scaleIt plays very vital role as the entire major home appliance manufacturers were heavily engaged in renovating and building production facilities to gain economies of scale. E. g. , reducing labor cost and manufacturing cost. QualityProduct Quality is also a key success factor it includes eight dimensions of quality which consumers want i. e. , performance, features, reliability, conformance, durability, serviceability, esthetics and perceived quality. Distribution related KSF There is a strong network of wholesale distributors.Strong direct gross sales capabilities via the internet. Marketing Related KSF They have well known brand name. They have a narrow product line. They are giving guarantees and warranties to their customer. Strategic Factors WhirlpoolWeight Rating Weighted Score MaytagWeight Rating Weighted Score Market Share 0. 25 4 1 0. 15 3 0. 3 Global expansion 0. 25 4 1 0. 5 3 0. 3 Learning experience 0. 20 4 0. 8 0. 20 3 0. 6 Product Quality 0. 15 3 0. 45 0. 25 3 0. 75 Production Capacity 0. 15 3 0. 45 0. 25 2 0. 75 get along 1 3. 7 2. 7 Competitive Profile Matrix (CPM)