Strategic Marketing Management: Analysis and Decisions - Term Paper Example

Strategic Marketing Management Analysis & Decisions Strategic Marketing Management Analysis & Decisions Question Opportunities Opportunities are features of external environment that encourage the performance of the industry. Technological developments and innovation facilitate manufacturing of more upgraded bicycle. Innovations lead to generation of new bicycle designs that further improve the image of the Japan industry. Moreover, potentially high market demand for the bicycles encourages the company to manufacture more. Already existing market for bicycles facilitate increased sales. Furthermore, the fact bicycles are useful in all geographical areas provide an opportunity for more bicycles to be manufactured. Initiative of the government to construct bicycle-specific routes and improves on roads further increase opportunities for more bicycle manufacturing. Threats Seasonal changes and weather effects may discourage people from purchasing bicycles. In addition, high cost for bicycle development presents a threat to the company. Low market demand of the bicycles because of cheaper substitutes is a threat. Moreover, laws that govern some geographical areas do not allow the use of bicycles in such areas thereby posing a threat to the national industry. Difficulties in estimating safety properties of the bicycles and complexity of the application to some uses are threats to the company. Strength The industry’s financial stability position offers a major strength to the company. Availability of skilled and quality employees of the Japan bicycle industry is strength of the company. Moreover, production of quality bicycles gives the company a good reputation thus strengthening the company. In addition, manufacture of user-friendly bicycles that are not complicated to the rider further increase the sales of bicycles. Japan bicycle industry ensures that the bicycles do not pollute the environment. The research and development department of the industry conduct excellent research on the needs of consumers and innovations that enhance manufacture of quality bicycles. Weakness *The industry does not provide safety measures to cyclists that may result in unskillful cycling in young people and accidents. The bicycles can be easily broken because of structural weakness. Moreover, competition from other manufacturers is a weakness to the company. The inability of increasing the visibility in customers presents a major weakness. Question 2 The main objective of Japan national industry is to make profit by ensuring the sale of quality bicycles to the consumers. Japan industry has developed sustainable and achievable methods to help maintain their competitiveness in the market. The industry further ensures that adequate capital, skilled labor and advance technology are available for effective competition. The Porter’s model provides a platform for evaluating competition threats to Japan industry. Threats of entry Notably, new entrants reduce market attractiveness. The potential of new entrants in the bicycle industry is low because of high capital investments required for starting the business. Moreover, the major possible barriers include product differentiation that makes price comparisons less meaningful to the consumer. Additional potential barriers include restricting access to distribution channels and securing prime locations to ensure that competitors to move elsewhere or settle for the second best opportunity. Moreover, patent protection discourages new entrants to the market. High economies of scale and experience effects further create barriers of new entrants. The market leader deters potential entrants by having substantial resources that it can devote to the battle, having a strong history of defending markets and being committed to fight. Competition from substitute products Essentially, products rarely sell in isolation and compete against substitutes. Competition from substitutes arise from consumers defining substitutes either broadly or narrowly where in broader definition, consumers have more potential substitutes they can switch to. Moreover, high prices, poor performance, and reduced demand by consumers can lead to substitution. Technology innovations can make a firm’s product a poor or obsolete substitute. Intensity of rivalry It is imperative to note that intense rivalry drives prices down, promotional expenses up and lowers profits of the firms thus peaceful markets are more attractive. Factors to consider before entering an industry includes how fiercely current competitors are fighting, presence of an upstart, benevolent leader and excess capacity. In addition, markets that offer big rewards obtain high profits and attract large firms. Bargaining power of customers Customers are essential part of a successful market. A market characterized by few powerful customers is less attractive since the customers will demand lower prices. The market that has few powerful customers experience intense competition. Moreover, competition increases when the market consists of individual buyers and customers engage in intensive decision making rather than buying products out of habit. Bargaining power of sellers Powerful sellers can dictate price increases for raw materials, inventory and suppliers. The power of the seller may be demonstrated by a franchise. Contractual agreement forces its franchisees to obtain their suppliers from it alone. Moreover, sellers of important product extracts onerous terms before buyers are allowed to acquire the product. Suppliers of japan industry such as Shimano offer standardized bicycles parts in large volume have higher power of supply. Suppliers also provide low cost on the commodities thus the industry maintain their services. All these factors contribute to the competitiveness of Japan Company. Question 3 National bicycle industry of Japan uses mass customization of its products to produce goods and services that meet the customer’s requirements. Japan national bicycle industry implemented mass customization strategy by producing bicycles in lots sizes of one and ensuring that orders received from customers are completed and delivered in two weeks. Furthermore, mass customization involves delivering high value goods to consumers after making their requests. Mass customization provides a strategy of producing goods on a large scale and increasing efficiency of mass production. It is important to note that customer demand for customization has led to success of mass customization. Customers demand for customized and innovative products. The skill of balancing customer’s need and company’s ability to fulfill is the major key for success of mass customization. It is important for the company to deliver the product at the correct to maintain the image of the company. Market conditions such as competition have led to success of companies that use mass customization. Mass customization further give the company a long term image in customer’s mind therefore winning them even when competition increases in the market. Product’s nature contributes to the success of mass customization. Creation of modular components provides a strategy of maximizing customer customization. Modular components are used in product that results in variable products that further increase economies of scale. In addition, functioning value chain that ensures rapid response to consumer needs has resulted in the success of mass customization. Chain reaction involves responding to customer’s request, production of the product, marketing and delivery to the customer. Formation of an integrated organization may further lead to success of mass customization. Question 4 National bicycle industry of Japan should turn its mass production process to mass customized production. Mass production led to accumulation of more bicycles in the industry that further led to losses due to reduced market demand. Mass customization strategy ensures that customers purchase products meeting their preferences. Adoption of the mass customization led to production of bicycles only when demanded with consumers. This led to doubling of the amount of high value products. Mass customization further differentiated the industry from their competitor Panasonic brand. Due to increased market demand of the bicycles, mass customization was able to meet the rising demand. Moreover, introduction of models with different tastes and color increased the market share for national bicycle industry of Japan. The overall effect of customization was increased sales and profits. In addition, mass customization improves the image of the industry and maintains customer relations with all its consumers. Mass customization benefits the customer because he or she acquires the knowledge of the national bicycle industry. Furthermore, the reduction in time of order response provides a faster way manufacturing the product and delivery to the consumer. Mass customization enhances in reduction of storage cost as the products are delivered once it is manufactured. The industry is always assured of selling the products and therefore do not have risks of not selling the goods. Read More