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Industry Competitors Rivalry among Existing firms

Figure 4: Forces acting on Logitech using Porter’s 5 Forces (in-car navigation systems UK market forces). Potential Entrants (Time/cost of entry, specialist knowledge, Economies of scale, barriers to entry etc.). Competitive Rivalry: 3 main market leaders are TomTom (30%),

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Industry Competitors Rivalry among Existing firms

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  1. Figure 4: Forces acting on Logitech using Porter’s 5 Forces(in-car navigation systems UK market forces) Potential Entrants (Time/cost of entry,specialist knowledge, Economies of scale, barriers to entry etc.) • Competitive Rivalry: • 3 main market leaders are TomTom (30%), • Navman Europe (24%), Garmin Int (20%) • Independent/departmental stores have lost ground as • Distribution channels and hypermarkets and supermarkets • Have entered the market distributing low-cost/low-quality products • Increased competition and new distribution trends have led to intense price competition – increased publicity and marketing initatives are needed by market players to maintain their hold on the market • Threat of New Entrants: • Huge growth potential of 387% in volume terms for SatNav products to reach 3.1 million units by 2011 in UK SatNav market sector provides tremendous incentive for more market players. HP, Acer and Packard Bell have already started to challenge the 3 leading competitors • Cheap, unbranded products from China/Far East as well as overseas manufacturing facilities already proving to lower barriers to entry Industry Competitors Rivalry among Existing firms Suppliers (Brand rep/uniqueness, geographical coverage, product quality, number/size of suppliers) Buyers (Buyer choice, size, price substitute) Bargaining Power Of Buyers Buyer purchasing power has increased due to intensification of price competition and demand for SatNav devices Adoption of SatNav systems has increased especially by middle class Demand for new product range is very high Expansion of distribution networks and greater marketing drive has fueled interest from buyers with volume sales rising by 512% in 2006 to over 646,000 units sold in UK • Bargaining Power of Suppliers: • Strong brand for Logitech and strong brand loyalty • Strong geographical coverage and manufacturing base • Continuous awards for innovation • Threat of Substitute Products/Service: • Mp3 players popularity has meant that substitute or multi-function SatNav products have started to enter the market (Fujitsu, Navman) • Real threat of multi-function SatNav devices substituting standard SatNav systems • Wi-Fi and iPod integration with SatNav is already in demand Substitutes (Alternative pricing/quality, trends, market distribution changes) Page 8a Michael Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1980

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