Introduction The Slade Company was a small but prosperous manufacturer of metal products designed for industrial application. It was located in central Michigan with 500 employees. The plating department of Slade had formed certain informal team in which some employees had dishonest behaviors. In this paper, we will discuss Slade’s external environment, central problem, alternatives, analysis, and finally give some recommendation. External Environment Competitive Market Slade’s competitive market is metal product market. It can be analyzed with the Porter’s Five Forces Model: risk of entry by potential competitors, rivalry among established companies, the bargaining power of buyers, bargaining power of suppliers, and threat of substitute products. Appendix 1 shows a summary of the five forces. The risk of entry by potential competitors is high. The capital requirement of small metal companies is not high, so building and establishing this kind of company doesn’t need a lot of resources. Also, Brand loyal of the current existence customers is not very strong thus new entrants are able to compete to enter the market. Also, the competition between existing players in this industry is high. There are about 619,000 metal enterprises in the USA in 2005 (IBISWorld, 2007).There are many companies that produce different kinds of metal products in the market. Besides, the bargaining power of buyers is high because product difference for the buyers of the metal products is small. It is not easy to differentiate the quality of one metal product from another. In addition, the cost of switching for the buyers is low. The number of substitutes of metal products is also high thus the buyers have great bargaining power. In addition, the bargaining power of the sources of inputs is high. The switching costs from one supplier to another are high because there are not many substitutes for the particular input for metal products. Besides, the number of suppliers who produce raw metals is small. The threat of substitute is high. There are many different kinds of substitutes for metal product company. These companies may also produce a large variety of product like Slade Company. Therefore, the substitute is low for this market. Only companies that produce high quality are able to not be substituted by the others. Internal Environment Strategy The strategy for competing in the market was a broad-differentiation strategy. It was broad because it produced a large variety of products such as clamps, inserts, knobs, and similar items. Also, it differentiates from the other metal companies because of its good quality, good delivery, and reasonable price.
Rivalry among competing steel producers. It is difficult for buyers to distinguish steel products from one steelmaker company to the other
With these solutions, the Slade Company could motivate their employees, encourage the teamwork, avoid internal conflict, and finally increase the productivity in the Plating Department. Analyzing the present situation There were 38 workers in the Plating Department of the Slade Company. Their jobs, working conditions, values and tasks varied significantly. They were all dependent on each other as they only received their workload after work at the previous stage was done.
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
Porter’s five factors include: the intensity of rivalry among incumbents; the threat of new competitors; the threat of substitute products; the bargaining power of the buyers; and the bargaining power of the sellers (Parnell, 2014). The rivalry with competitors in the used vehicle marketplace exhibits a level of intensity based on the age and stage of this industry. In the US, the automotive industry has been in a mature phase of its life cycle for nearly 50 years (Gao, Kaas, Mohr, & Wee, 2016). As the leader in the industry, Manheim Auto Auction must maintain a keen awareness for potential changes in consumer behaviors or disruptive technologies that would be more difficult for us to quickly adapt to. The second factor, the threat of new challengers entering the industry, coincides with the first factor in understanding our competition. There are high barriers to enter the vehicle auction market and Manheim has set the industry standard for buying and selling used vehicles at live auctions and online. The infrastructure required to open a competing auction is quite significant, along with the necessary permits, licenses, and federal requirements there is limited ability for traditional competitors to enter the marketplace. Conversely, this also means that the industry has very high exit
The presence of established competitors poses the biggest threat to Salomon. Customers create a high demand for products in the ski and snowboard equipment industry. Salomon enjoys buyer loyalty, but if they are unable to complete production in time to meet customers’ demand, customers will purchase products from other companies. The primary threat of new entrants comes from internet sellers, but Salomon has customers that are loyal and it would be difficult for new entrants to achieve the same level of brand loyalty. The threat of substitute products also provides a small threat, with the potential for counterfeit products to dilute the brand value as a
Adopting a strategy of differentiation makes firms provide products and services what are distinct in some way valued by customers.
Differentiation: by focusing on those activities associated with core competencies and capabilities in order to perform them better than do competitors. The key point of this strategy is to create something that customers feel as being unique.
How has the healthcare industry changed (pre-1983 to post 1983)? What are the implications for BD? How has BD managed to build up an 80% market share in this market? Which many competitors bigger than BD have tried to enter without success?
Differentiation through marketing strategies, this is a form of innovation driven by the need to create a superior brand (Sadler, 2003).
Threat of substitutes in market as best quality is not always a priority for some customers as they are price sensitive.
When looking at YourFire Inc. and its five-competitive force we can see what is more profitable to the company and industry. For instance, they have a low barrier to entry, but more expensive to start up in the market for camp stoves. Therefore, rivalry among existing firms is strong. Although, they will not have to worry about new entrants due to their unique product. In addition, the threat of substitute camping stoves is limited. It will be more difficult for competitors to manipulate such engineering skills that produced in Yourfire. Whereas, perhaps customers relatively strong with the ability to select other camping stoves based on their performances and price. Their power of suppliers with raw materials is a strong force since the company
primary strategies of each competitor (e.g. low cost leader, focused differentiation, prospector, reactor, etc.), Porter's 5-forces assessment):
If competitors offer equally attractive products and services, then one will most likely have little power in the situation, because suppliers and buyers will...
ABC Electric is facing several issues that needs to be address in order to stabilize their competitors growth as well as increasing their market share and profitability. These issues are closely related to their external competitive strategy, which seems to be non-existence on a whole. Base on my brief discussion above, I believe that ABC Electric has in-voluntarily allows, one of its competitors to make advancement by improving its quality and service of their product without increasing price. Due to the fact that, ABC perceived its customers to be immune to price thereby remaining loyal to its product because of the quality and reliability that comes with the product image. As a result, this perceived brand loyalty created a threat to the company. The second issue facing the company is, a supplier of whom ABC purchases its electric motors from for its welder has raised the price by almost 10%. In looking at this, the bargaining power of the supplier is very strong because the switching cost might be very high. Moreover, it will become damaging to the company based on the current reduction in price within the industry if the problem is not solved.
During hard economic times it may be possible for a firm to switch suppliers be it from domestic to international or vice-versa for some required materials. However, this might not be desirable for all materials. Another issue that often occurs is the delay in shipment with the transportation companies. This may require that certain parts be divided into smaller batches and shipped separately, which would increase the lead time and shipping costs.