Chinese fireworks essay
The competition in the Chinese fireworks industry is fierce with "cutthroat price competition" and "hard-to-penetrate distribution channels" with the entrance of small companies; competition intensified, driving the price, and ultimately the profitability of each company, to the floor. Companies were forced to hire cheap labor, which consequently led to poor production practices and quality materials. This resulted in "low-quality-fireworks-related damages and injuries"; and, pushed increased stricter regulation regarding fireworks. As competition grew more intense, companies began to copy any new or popular product that came out to the market and under priced each other just to create sales. The resulting rule of competitive forces in the fireworks industry, which states that "the stronger the collective impact of competitive forces, the lower the combined profitability of participating firms", (p.92), was shrinking and obliviating the profit margin of the industry.Of the five competitive forces, the case portrays that the strongest in the industry of fireworks is "The rivalry among competing sellers in the industry". This force drove the rest of the forces and became the initiator or catalyst to the cutthroat competitiv
The strategy options that a new entrant should consider are actions and approaches that define how the company will manage R&D, production, sales and marketing, and finance. With this in mind, the company can better allocate its efforts into future growth and prosperity while enjoying a slow but gradual increase in profit margins. Also, a new competitor should have strategies in position for adaptive reactions to changing circumstances from initiatives to out compete rivals to defensives to guard against threats to the company's well being. In addition, strategic alliances and collaborative partnerships or mergers should be considered to better improve the strength and power of a newcomer should the need arise. e industry. The industry rivalry was centered on price competition to offer buyers the best and lowest price no matter the extenuating circumstances that would ensue. This principle of competitive markets, as stated on page 82, is better kwon as "competitive jockeying among rival firms is a dynamic, ever-changing process as new offensive and defensive moves are initiated". Consequently, due to the intense price competition, the market prices fell well below unit costs, forcing losses on mostly all the rival companies. lower end price; and in addition, since there no switching costs, they could play the suppliers against each other. This meant that there was absolutely no collaboration between sellers and suppliers that lead to a weak or nu
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, Fiesta Texas, Jerry Yu, competitive forces, fireworks industry, profit margin, five competitive forces, key factor, five competitive, price competition, competitive pressures, stated page, industry fireworks, increase profit,
Approximate Word count = 987
Approximate Pages = 4 (250 words per page double spaced)
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