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Assess the attractiveness of the Skod light bulb industry using Porter's Five Forces framework? Read the case -Skod electric light bulb industry All electric light
Assess the attractiveness of the Skod light bulb industry using Porter's Five Forces framework? Read the case -Skod electric light bulb industry All electric light bulbs are largely made out of glass and metal and this is likely to remain the same in the foreseeable future. In Skod, 90% of glass is produced by three companies. However, for all of these three companies, light bulb manufacturers are unimportant customers. Most glass manufacture goes to the construction industry, light bulb manufacturers take less than 05% of the country's glass production. Metal manufacture in Skod is dominated by one company, OmniMetal. Most metal is sold to the automobile industry. Light bulb manufacturers take less than 01% of OmniMetal's production. However, the quality of glass and metal required by the light bulb manufacturers is quite standard, so switching between suppliers is, in theory, relatively easy. Light bulb manufacture takes place in factories which require substantial initial investment and have no obvious alternative use. In Skod, light bulbs are low cost commodity products which are replaced infrequently by domestic consumers. Commercial consumers change their light bulbs a little more often and some businesses have recently switched all their bulbs to LED to save energy, reduce costs in the long term and to reflect their aspirations as 'green businesses'. There is very little brand awareness in the light bulb market and all the light bulbs have to fit the standard sockets used in the country. Electric light bulb manufacture in Skod is dominated by the five companies listed in Table One. Two years ago a large American light bulb manufacturer, Krysal, attempted to enter the market. The five dominant companies in the industry reacted to this by cutting prices, running marketing campaigns which emphasized the benefits to the country of home-based production and lobbying supermarket groups to not stock products produced by the new entrant. Krysal withdrew from the market after six months. When not focused on fighting new entrants, the five main competitors are regularly involved in price cutting, disruption of competitors' distribution channels and aggressive marketing
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