Swot analysis , Pest Analysis and Porter's 5 force model
1. ANALYSIS OF TELEVISION AND
SOFT DRINKS INDUSTRY
Submitted To:
Ms. Japneet Kaur
Submitted By:
Shikha
Shivang
Shobitash
MBA-HR
2. What is an industry?
An industry is a group of manufacturers or
businesses that produce a particular kind
of goods or services.
For example-television industry, tourism
industry, soft drinks industry, fish industry,
food processing industry etc.
3. Classification of industries
Industries can be classified in a variety of
ways. At the top level, industry is often
classified into sectors: Primary or
extractive, secondary or manufacturing,
and tertiary or services. Some authors add
quaternary (knowledge) or even quinary
(culture and research) sectors. Over time,
the fraction of a society's industry within
each sector changes.
4. Classification of industries
Industries can be classified in a variety of
ways. At the top level, industry is often
classified into sectors: Primary or
extractive, secondary or manufacturing,
and tertiary or services. Some authors add
quaternary (knowledge) or even quinary
(culture and research) sectors. Over time,
the fraction of a society's industry within
each sector changes.
5. Sectors
Definitions
Primary
This involves the extraction of resources directly from the Earth, this
includes farming, mining and logging. They do not process the products
at all. They send it off to factories to make a profit.
Secondary
This group is involved in the processing products from primary
industries. This includes all factories—those that refine metals, produce
furniture, or pack farm products such as meat.
6. Tertiary
This group is involved in the provision of services. They include teachers,
managers and other service providers.
Quaternary
This group is involved in the research of science and technology. They include scientists.
Quinary Sector
Some consider there to be a branch of the quaternary sector called the quinary sector,
which includes the highest levels of decision making in a society or economy. This sector
would include the top executives or officials in such fields as government, science,
universities, nonprofit, healthcare, culture, and the media.
7. Television industry
• In the last five years color television industry (CTV) has
witnessed drastic changes in the intensity of
competition.
• Exchange schemes, free gifts, price offs, prizes, deferred
payment schemes and other incentives as promotional
tools have been deployed by the players, which certainly
have made the market, vibrant witnessing a new
scenario with a new market profile. The entrenched
position of the Indian market leaders in CTVs’ like
8. Television industry (continued….)
Videocon, BPL and Onida have been challenged by MNCs such as LG,
Samsung, Sony, Philips, AIWA, Akai, Panasonic, Sansui and Sharp;
some in a perceptible way, others threatening to do so.
• The industry is going through turbulent transformation. Companies
are relooking at their strategies and are desperate for growth.
•
A major factor contributing to the growth has been availability of
consumer financing schemes.
• The industry has seen environmental factors operating in the
Industry to provide a basis for devising Strategy.
9. Future prospects of television
industry
• 4K and 8K technology
4K UHD is a resolution of 3840 pixels × 2160 lines (8.3 megapixels,
aspect ratio 16:9) and is one of the two resolutions of ultra high
definition targeted towards consumer television, the other
being 8K UHD which is 7680 pixels × 4320 lines (33.2 megapixels).
4K UHD has twice the horizontal and vertical resolution of
the 1080p HDTV format, with four times as many pixels overall.
10. Future prospects of television
industry
Smart television
A smart TV, sometimes referred to as connected TV or hybrid TV,
describes a trend of integration of the Internet features into
television sets and set-top boxes, as well as the technological
convergence boxes. The devices have a higher focus on
online interactive media , Internet TV, over-the-top content, as well
as on-demand streaming media, and home networking access, with
much less focus on traditional broadcast media than traditional
television sets and set-top boxes. Similar to how the Internet, Web
widgets, and software applications are integrated in modern smart
phones.
11. Soft drinks industry
Soft drinks are a kind of beverage that do not contain alcohol as the
active agent and hence are referred to as 'soft' drinks, in opposition to
'hard' which means alcoholic beverages. There are mainly two kinds of
soft drinks, one that is carbonated and one that is non-carbonated.
They are believed to taste best when consumed chilled. The
different types of soft drinks include colas, flavored water, carbonated
water, sweet iced tea, fruit drinks, carbonated soft drinks, diet soft
drinks, and fruit punch.
12. Soft drinks
Raw materials used in soft drinks:• Water(90-95%)
• Artificial flavors
• Acids(citric acid, phosphoric acid etc.)
• Natural flavors
• Caffeine
• Carbon dioxide
• Color
• Sugar
13. Future prospects of soft drinks
industry
•
The Indian soft drinks market generated total revenues of $3.8
billion in 2010, representing a growth rate of 11% for the period
spanning 2006-2010.
• Carbonates sales proved the most lucrative for the Indian soft
drinks market in 2010, generating total revenues of $1.9 billion,
equivalent to 50.5% of the market's overall value.
• The performance of the market is forecast to decelerate, with an
anticipated CAGR of 9.1% for the five-year period 2010-2015, which
is expected to lead the market to a value of $5.9 billion by the end
of 2015.
14. Future prospects of soft drinks
energy(continued…..)
• Soft drinks consumption has reached saturation point.
Therefore ,a decline is expected to follow in the growth
rate of soft drinks industry.
• People are becoming more health conscious now-adays. They are shifting towards natural fruit and
vegetable juices.
16. Pepsi
Pepsi was first introduced as "Brad's Drink"[2] in
New Bern, North Carolina, United States, in 1893 by Caleb Bradham
PepsiCo is one of the largest food and beverage companies in the
world.
Its products include a variety of salty, sweet, and grain-based
snacks as well as Csds and non-Csds. the company is responsible
for the manufacturing, marketing, and sales of these goods. it has 18
brands in its portfolio.
It headquartered in new york
17. Dr Pepper Snapple (DPS)
The drink was created in the 1880s by Charles Alderton of
Waco, Texas and first served around 1885.
The Dr Pepper snapple Group is a leading integrated brand
owner, bottler, and distributor of soft drinks in the united
states, Canada, and Mexico.
the company has 15 brands
headquartered in Plano, texas
19. Samsung
Samsung was founded by Lee Byung-chul in
1938 as a trading company
Samsung Group is a South Korean
multinational conglomerate company
Headquartered in Samsung Town, Seoul
20. Videocon
Videocon is an Indian multinational industrial
conglomerate headquartered in Gurgaon,
The group has 17 manufacturing sites in India and
plants in Mainland China, Poland, Italy and Mexico
It is also the third largest picture tube manufacturer in
the world.
The group is a US$5 billion global conglomerate.
21. Onida
Onida was started by G.L. Mirchandani and Vijay
Mansukhani in 1981 in Mumbai
Onida is an electronics brand of Mirc Electronics, based in
India
Onida is well known in India for its colour CRT televisions
22. Panasonic
The company was founded in 1918
Panasonic is the world's fourth-largest
televisionmanufacturer by 2012 market share
It is a Japanese multinational electronics corporation
headquartered in Kadoma, Osaka, Japan.
23. LG
Lucky Goldstar is a South Korean multinational conglomerate
corporation
LG Corp. founder Koo In-Hwoi established Lak-Hui Chemical
Industrial Corp. in 1947
Its headquarters are situated in the LG Twin Towers building in
Yeouido-dong.
24. Sony
Sony, is a Japanese multinational conglomerate corporation
headquartered in Kōnan Minato, Tokyo, Japan
Sony found its beginning in the wake of World War II. In
1946.
The company is one of the leading manufacturers of
electronic products for the consumer and professional
markets
Sony is ranked 87th on the 2012 list of Fortune Global 500.
34. S
trengths
What advantages does our company have?
What do we do better than anyone else?
What unique or lowest-cost resources do we have access to?
What do people in our market see as our strengths?
What factors mean that we "get the sale"?
35. W
eaknesses
• What could we improve?
• What should we avoid?
• What are people in our market likely to see as
weaknesses?
• What factors make us lose sales?
36. O
pportunities
• Where are the good opportunities facing us?
• What are the interesting trends we are aware of?
Useful opportunities can come from such things as:
• Changes in government policy related to our field.
• Changes in social patterns, population profiles, lifestyle
changes.
• Local events.
37. T
hreats
• What obstacles do we face?
• Are the required specifications for our job, products or
services changing?
• Is changing technology threatening our position?
• Do we have bad debt or cash-flow problems?
• Could any of our weaknesses seriously threaten our
business?
38. Example:Coca-Cola Swot Analysis
Strengths
Weakness
Significant focus on
The best global brand in the
world in terms of value ($77,839 carbonated drinks
Undiversified product
billion)
World’s largest market share in
portfolio
beverage
High debt level due to
Strong marketing and advertising
acquisitions
Most extensive beverage
Negative publicity
distribution channel
Brand failures or many brands
Customer loyalty
Bargaining power over suppliers
with insignificant amount of
Corporate social responsibility
revenues
39. Coca Cola Swot Analysis
Opportunities
Bottled water consumption
growth
Increasing demand for healthy
food and beverage
Growing beverages
consumption in emerging
markets (especially BRIC)
Growth through acquisitions
Threats
Changes in consumer
preferences
Water scarcity
Strong dollar
Legal requirements to disclose
negative information on product
labels
Decreasing gross profit and net
profit margins
Competition from PepsiCo
Saturated carbonated drinks
market
40. PEST Analysis
• This analysis is essential for an organization before
beginning its marketing process
• Consists of internal environment and external
environment
Pest Break Up:
• Political
• Economic
• Socio Cultural
• Technological
41. Political Factors
• This is the most important influence on the regulation
of any business.
– How stable is the political environment?
– Influence the Government Policy / Law on your
business
– Government’s position on Marketing Ethics
– Government’s view on culture under religion
42. Economic Factors
• Government outlook towards
– Bank Financing
– Interest Rates
– Exchange Rate Mechanism
– Incentives for Exports
– Restrictions for Imports
– Inflation
– Labor Policies
44. Technological Factors
• Advantage of Technology
– In terms of Economies of Scale
• New Discoveries & Innovations
• Speed & Cost of Technology Transfer
• Rate of Obsolescence
45. Role of PEST
• Helps Assess the market including Competitors from
the stand point of a Particular Business.
• PEST is relevant for any type of Business large, small
& medium.
Case Study On McDonalds Follows this Slide
46. POLITICAL CHALLENGES
Health and Safety Guidelines
Fast food consumption has been shown to increase
calorie intake, promote weight gain and elevate risk for
diabetes criticised for caloric content, trans fats and
portion sizes
Ecological/environmental issue
One of the largest consumers of paper products in the
US leading to millions of pounds of food packaging
waste littering roadways, clogging landfills and spoiling
quality of life.
47. ECONOMIC CHALLENGES
Low set up costs leading to rapid expansion
keeping the prices low for the customers.
Franchising facilitates set up McDonald's
corporation provides financing assistance and
training for new franchise owners to manage
cash flow and keep businesses profitable
48. SOCIAL CHALLENGES
Health fears
Customers now opting for more healthier options like
SUBWAY which offers more variety for health conscious
customers.
Emphasis on food safety
49. TECHNOLOGICAL CHALLENGES
Streamlining of processes to improve efficiency through
technology enhancements such as FPI's Help Desk
Service, network and application consolidation and
other technology implementations, operations of the
company are greatly improved
Marketing done by means of television advertisements.
Implemented technology to improve supply chain
management
52. Importance of The 5 Forces
Measure and monitor
strategy effectiveness
Industry analysis :
1) Industry relevance
2) Industry players
3) Industry structure
4) Future changes
What strategy
to use?
Basic knowledge
of business strategy
& forces that influence
the decision making
Strategize :
* Competitive advantage
* Cost advantage
* Market dominance
* New product development
* Contraction / Diversification
* Price leadership
* Global
* Re-engineering
* Downsizing
* De-layering
* Restructuring
How to deal with competition?
53. Threats of New Entrants
The easier it is for new companies to enter the industry, the
more cutthroat competition there will be. Factors that can
limit the threat of new entrants are:
1.
2.
3.
4.
5.
6.
How loyal are the end users in this industry?
How troublesome or hard is it for the end users to switch and use
another product?
Does it require a large seed capital to enter this industry?
Do entries to this industry regulated by government?
How hard is it to gain access to the distribution channels?
How long does it take for new staff to acquire the necessary skills to
do the work?
54. Threat of Substitutes
Threats of Substitute in the Porter’s theory actually
means goods and services that does similar functions
How many close substitutes are available?
How pricey are the substitutes?
What is the perceived quality of the substitutes?
55. Intensity of rivalry among established firms
1.
2.
3.
How many close competitors exist in the industry?
What are the sizes of your close competitors?
What is the industry structure? Is it a fragmented,
consolidated, oligopoly or monopoly industry?
4.
What is the current industry growth rate?
56. Bargaining power of Customers
How many companies are there for the buyer to choose
from?
Are the buyers buying a huge volume?
Do we depend only on a few buyers to sustain our
sales?
How hard is it for the buyers to switch and use a
competing product?
Do the buyers have the capacity to enter your
business and produce the goods themselves?
57. Bargaining power of Suppliers
Are there substitutes for our suppliers’ products?
Do our suppliers serve multiple industries?
Does the total industry revenue accounting for only portion of
the supplier’s total revenue?
Do we have high switching cost to use another supplier?
Do suppliers have the capacity to enter in our business?
Does our company capable to enter the supplier’s business?
58. Porter's 5 Force For Sony TV
Threats of new Entry (Low): Electronic industry needs huge
amount of capitals. High scale economy and constant innovation is
another barrier to a new entrant. Moreover, the government policy acts
as entry barrier for a new company.
Bargaining Power of Buyer (High): For Sony Corp. product the
bargaining power of buyer is very high as there is almost no switching
cost from one brand to another. And the information technology
provides the customers with wide range of alternatives.
Bargaining Power of Supplier (Low): Sony has a global band of
suppliers giving the suppliers no upper hand (bargaining power) over
Sony. Moreover suppliers are comparatively small entity than Sony so
suppliers have weak bargaining power. Sony usually negotiates
directly with its supplier to obtain high quality product in low price.
59. Porter's 5 Force For Sony TV
Threat of Substitute Products (Low): Sony’s varied range of
products has no substitute or a very few that seems to be
obsolete or have on foot out of the door. Thus the possibility
threat of substitutes is moderately low. Considering that Sony
has built a good reputation and strong customer loyalty, it
effectively positions the company’s products against product
substitute to some extent; this is a surplus for the company.
Intensity of Rivalry (High):Industry rivalry is high due to
relatively intense competition and high exit cost. It is also
largely due to the numerous and equally balanced competitors in
the markets, generally short product life cycle as well as high
R&D, fixed and storage costs. The growth is slow and thus the
intensity of competition.