Summary of case study
Pest = opportunity and threat
The social environment deals with the demography (baby boomer, ages 45 t0 65) and the consumers trend and this is an opportunity to the industry. Economic environment deals with the influence of the economy on the industry “people within the ages 54-65 generally earned higher income, and has higher level of home ownership”
Bargaining power of suppliers: in this case the power of supplier is low. “as it is common for retailers to change suppliers frequently if their product were not selling well” Bargaining power of buyers: the wholesale buyers in this industry i.e as Walmart, Canadian tire etc. have a lot of power in this industry because they buy in large quantity and has the power to influence price. The other small retail who are just two third have “limited shelf space which means they only carry a small selection of items and ordered in small volume”. This buyers have backward vertical integration as they have the ability to become suppliers ‘many large retail chains also opened sourcing offices in Asian countries, bypassing intermediaries by buying directly from local manufacturer. Threat of new entrant: the barrier to entry of the furnishing industry market is low as manufacturer have moved there business to Asia which is a low base production therefore making the market easy to enter and retailers have direct access to the manufacturing companies. Rivalry among competitors: rivalry is high due to the fact that competitors are not differentiated from one another as these forces firms to compete base on price rather than uniqueness of offerings, ‘many new entrant coming in’ ‘ five major competitor have a combined shares of 20percent of the market’ therefore making competition high for the competition. Threat of substitute product: based on the case, there’s no concrete information as regard substitute product. Attractiveness of Industry: the industry is not attractive because the...
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