Coloratura a. Developing nations desire goods seen on TV. B. Middle-aged baby boomers want attractive, high quality and well featured products, like BMW and Mayday. C. Dual career couples increases need for labor-saving appliances, second cars, and day care. D. Divorce and career mobility means need for more houses and goods to fill them (Canadian home appliances expected to grow by 2. 3% per year). E. Emphasis on quality, ease use, well featured, and low energy and water consuming appliances. F. European and Asian inclined to small appliances while American prefers large g.
Overall, there is a shift from a primary emphasis on quality and reliability to speed and agility as well. 4. Technological a. Fuzzy logic technology being applied to sense and measure activities. B. Computers and information technology increasingly important. B. Task Environment 1 . Potential Entrants: low level of threat, as the market is consolidated (from 300 to 5 dominants in North America and from 150 to 30 appliance producers in Europe, with only 3 big ones) and mature. Higher entry barriers such as economies of scale, economies of scope, and capital requirements, discourage new entrants.
Only large appliance firms can enter other markets. Asian companies miss a dominant leader (their leader has only 10% outside Japan). 2. Rivalry High: Whirlpool, ABA Electrocute, and GE have enormous resources and developing global presence. The three giant European companies (Electrocute, Busch- Siemens, and Whirlpool) and GE are building a dominant presence in Latin America through acquisitions and Joint ventures. The industry is mature and concentrated, slowing down sales and strengthening competition. European design popular and 3. Suppliers’ Power Low: technology and materials used in manufacture can be resourced worldwide.
They cannot easily make a forward integration to compete with Mayday. But Mayday may be captive of the advertisers (Leo Burnet). 4. Buyers’ Power Moderate: necessity to keep dealers’ and distributors’ loyalty. Sears has its own brand (Commoner). Super retailers are more important, mom and pop dealers less. But most dealers cannot easily make a backward integration to compete with Mayday. However, their switching cost for another brand would be low (35% of loyalty).. 5. Substitutes Unlikely or Low: although manual labor in family washings is still used, many families use washing machines.
