Industry and competitor analysis.
This analysis gives insight into the industry and market a business intends to operate in.
Rivalry among existing firms
Number and balance of competitors:
In this industry there are a considerable amount of players. However price competition is not highly prevalent as businesses charge customers for the quality of the finished good and the service provided. Prices charged vary according to the type of curtain fabric and designs. Therefore customers are willing to pay a higher price for products with higher quality fabrics and designs.
Degree of difference between products:
Curtains are similar in structure as it is material suspended from above on a rail. However the designs, colors and the quality of
183). There is a high possibility of fabric manufacturers entering the curtain manufacturing business as the barriers for entry are quite low. This enhances the bargaining power of suppliers.
Bargaining power of buyers:
Buyer group concentration
The buyers of curtains are large in number which indicates that buyers are not concentrated thus lowering their ability to affect the profitability of the curtain manufacturers. However if the high income earners are targeted to charge a premium price, this case would present a concentration of buyers and they are able to pressurize firms in the curtain manufacturing industry to lower costs.
Buyer’s costs:
Curtains are a much needed product for any household. Therefore buyers will be more sensitive to the price it pays and would bargain to get the best price for the product.
Degree of standardization of supplier’s
However there is a possibility that buyers could enter the industry as barriers to entry are low.
Threat of Substitutes:
Substitute for curtains are very low. It is quite common to see plastic or wooden blinds used in office settings. However in homes and hotels this is rarely seen as curtains give a personal touch to the interior design and makes living spaces more comfortable. In luxury hotels and homes it is quite evident how curtains are used to elevate the elegance and sophistication. Different textures and colors of fabric are used to create elegant spaces. In the event plastic or wooden blinds or such substitutes were used, the space would definitely not have the same ambience.
Threat of new entrants:
The barriers to entry in this industry is quite moderate to low. Therefore there is a threat of new entrants. However customers wish to have quality goods and excellent customer service. By differentiating our business from competitors by offering durable products with high customer service standards this threat can be
Their price must be one that is attainable and reasonable for the offerings. The Kotler & Keller text suggests that facilities analyze competitors and their offerings, estimate their own costs, and determine demand, in order to set the appropriate price.
Due to the various options of distribution channels their prices vary. Consumers take that into consideration when purchasing their products.
As discussed earlier, Baldwin products are priced with the competition in mind. Management is not concerned with setting high prices to signal unattainable cutting edge products, nor is it pursuing to achieve the goals of matching low prices by selling higher quantities of products. In lieu, value pricing is practiced so that our customers feel comfortable purchasing our products and so they feel comfortable coming back.
The rivalry between existing companies is intense in the global furniture market and key industry players in Europe include Designs Inc, Galiform plc, Wal-Mart Stores Inc., Argos and others. However, Ikea today is the undisputed market leader in the furniture industry discount on the global scale. The threat of new entrants in the industry is low, and the chances of entrance of new competition Ikea is scarce because the current market is saturated and the significant amount of financial investments and experience are necessary to become a shop furniture discount on a global scale. The bargaining power of customers of Ikea is strong, as competition is intense and customers have a wide range of alternative options offered by
The range of products should cover the total home area, indoors as well as outdoors, with fixed furniture or loose furniture. The profile a company will want to bring to the table will give competitors and buyers a direct image of the company. There should be a wide selection of products along with the quantity of stock to sell to all customers. Quality and price are also an important factor but should be left up to the consumer to decide what they are looking to do in the long run.
The U.S. furniture and bedding industry totaled revenues of $75 billion comprising some 82,567 businesses in 2013. Revenue from wholesale business operations totaled $33 billion during the same year, shared between 4,021 businesses. Manufacturing in the U.S., numbering 4,906 businesses, accounted for $25 billion of revenue in 2013. With the exception of furniture manufacturing in the U.S. which shows an annual revenue growth rate of 2.4% from 2009-2014, furniture wholesale and retail have seen an overall decline in revenue of -3.2% and -1.5%, respectively (IBISWorld, 2014). Over the next three years, as the housing market and general economy continue to stabilize after the 2008 recession, retail sales of furniture and home items are expected to grow by 1%, reaching a total $90 billion by 2017 (Euromonitor, 2013).
Price Based Theories - This first theory focuses on the classification and study of the quality price relationship. And this led to the initial conceptualization of value as a cognitive tradeoff between perceptions of quality and sacrifice. As per this view the external ques influence product quality and value. Various instances so offered by Agarwal and Teas (2001, 2002, 2004); Dodds and Monroe (1985); Dodds et al. (1991); Grewal et al. (1998a); Li et al. (1994); Monroe (1979, 1990); Monroe and Chapman (1987); Monroe and Krishnan (1985); Oh (2003); Teas and Agarwal (2000); Wood and Scheer (1996) state the importance of price which does a bearing on the marketability of a
For durable and luxurious goods when deciding to buy these products, price is one of the most important factors to be considered as the price of these products are high. Therefore, people will compare the price among various shops and purchase from the shore that offers the best deal at the same quality.
The modern theory of price discrimination began with the work of Arthur Cecil Pigou (1877- 1959) and is defined by Machlup (1955): "Price discrimination may be defined as the practice of a firm or group of firms of selling (leasing) at prices disproportionate to the marginal costs of the products sold (leased) or of buying (hiring) at prices disproportionate to the marginal productivities of the factors bought (hired)". But in simpler terms, "price discrimination is often defined as charging different customers different prices for the same or highly similar offering" (Smith, 2004). The motive behind this is to increase profit by reducing consumer surplus. If the same price is charged to all consumers, some potential revenue is lost since some of the consumers would have been prepared to pay more. But before answering the question of whether firms should price discriminate or not, we will have to distinguish between the various types of price discrimination and before that it is important to note that there are three necessary conditions for a firm to practise price discrimination, namely, the firm must be a price maker, the elasticity of demand must be different in the different markets and finally, the market must be clearly separated.
Our perspective on the beauty and luxury of course needs to be expanded, because the design of an innovative low-cost housing we will see many designs that are not standard. Although the actual meaning of beauty and luxury, with a detailed execution and materials used, also applies in architecture in general, not just for low-cost housing. The beauty of a substance should be fundamental to the realization of the house.
Textile production and consumption is an increasingly global affair as production continues to shift to developing countries. Developing countries have seen an explosion in the growth of their textile exports, and for many countries textiles are a significant portion of their total exports. In response to increasing competition from low-value imports from developing countries, industry leaders in developed countries have made significant capital investments in order to increase productivity and move into advanced market sectors.
The second market structure is a monopolistic competition. The conditions of this market are similar as for perfect competition except the product is not homogenous it is differentiated; thus having control over its price. (Nellis and Parker, 1997). There are many firms and freedom of entry into the industry, firms are price makers and are faced with a downward sloping demand curve as well as profit maximizers. Examples include; restaurant businesses, hotels and pubs, specialist retailing (builders) and consumer services (Sloman, 2013).
Although there will not be the ‘exclusivity’ appeal as many copies of an item of clothing is made, the price reduction will attract customers making them strong competitors in the market. Based on the primary resource found, the surveys depicted that majority (7 out of 13 volunteers) found Mr Price to have low prices and high quality items. When asked about Mr Prices strengths 8 out of 13 (61.5%) indicated that affordable clothing was a strength and is the reason they shop there. 3 out of 13 (23.1%) said they were easily
The second way is to achieve low direct and indirect operating costs is gained by offering high volumes of standard products and offering basic no-frills products. Production costs are kept low by using less parts and using standard components. Limiting the number of models produced to ensure larger producti...
Price competition among rivals is close to nil, industry participants are very competitive when it comes to product differentiation. Product offerings to satisfy consumer demands include a variety of coffee, juices, muffins, bagels, cookies, cream cheese sandwiches, soups and other miscellaneous items.