Industries

This Case gives an account of how a ship management company was able to set itself apart from competitors and from its clients’ own in-house technical and crew-management capabilities by embracing a culture of continuous improvement and by implementing Total Quality Management systems. The shipping industry was not alone in having regulation imposed upon it, but its distinctly international nature made ship managers, as cost-cutting practitioners, particularly open to criticism.

A ship management company’s very existence hinged upon its ability to convince ship-owners that it would preserve their valuable assets and maximize revenue-earning potential – demonstrating that its collective skills were superior and more cost-effective. As a result, an effective quality assurance system that continuously improved the organization’s human and business systems could enhance efficiency and also have a significant marketing impact.

Analysis

With the changes taking place in the shipping industry, what were the ship-owners’ motivations for outsourcing vessel and crew management to third-party ship managers?

With the rise in outsourcing arrangements, management structures have become more explicit. In the highly competitive international shipping industry, ship-owners were continually seeking ways to keep their costs down and their business performance ahead of the competition. As a result, ship-owners were taking a serious look at the option of outsourcing crew and technical management functions as a way of lowering costs and keeping pace with industry best practices.

By concentrating on the sales and marketing function, ship-owners could hive off operations activities to more suitable providers who were knowledgeable about the regulatory climate and on the cutting edge of ship management (in terms of infrastructure, expertise and organizational capabilities). How was Eurasia able to differentiate itself from the competition? Eurasia can be said to have taken a boutique approach within its industry, and to have upheld a relentless commitment to serving its customers’ interests.

Since it was inclined to remain a boutique, Eurasia was cautious about pursuing growth but was still willing to take risks in its company philosophy and business model. As a member of the Schulte Group of companies, it was able to offer the advantages of economies of scale, yet was also able to customize its service delivery to suit different customers’ needs. By contrast, many of its larger competitors had gone through mergers and acquisitions to remain economically viable, and thus risked losing their personal touch with the customer.

To offer even closer proximity to its clients, Eurasia embarked on a five-year plan to expand its operations, and established a network of regional offices that could operate in the same region and time zone as the customer.  What is Total Quality Management (TQM), and why was it an appropriate organizational change mechanism for Eurasia? The term TQM was widely used to describe a focus on the pursuit of quality within an organization. Early discussions of TQM hinged around the Deming Management Method and statistical process control techniques, particularly in connection with manufacturing environments.

The works of later TQM experts such as Philip Crosby have been less statistically and technically oriented and more people-oriented. Regardless, TQM is built on core mandates to continually improve systems and processes, and to focus the people and resources of the organization to delivering customer value – as ultimately, value exists only in the eyes of the customer. Broadly speaking, the TQM philosophy is founded on several conceptual principles:  A definition of “quality” in terms of meeting the customer’s requirements.

Anyone producing work output may be considered a supplier, while any party receiving work inputs constitutes a customer. The customer relationship is held in esteem and a supplier’s responsibility is to understand and meet the customer’s requirements. Quality is achieved by undertaking the right action the first and every time. * The organization requires a proactive approach to ensure that quality is achieved, thus a system of prevention must be coupled with a reactive system of inspection. Quality must be continually measured; a measurement framework can determine whether organizational resources are being deployed optimally.

Eurasia’s President, Rajaish Bajpaee, recognized that a changing regulatory climate, the global dispersal of his industry and intensifying competition among ship managers meant a robust quality assurance system was needed to keep his organization focused on customer value. With complicating factors on so many fronts – the global distribution of labor, variety in the types of vessels under management, maritime regulations, procurement and logistics, risk and liability – encouraging cross-functional collaboration would increase the flow of information, improve problem-solving capabilities and enhance customer focus.

The very process of developing such a framework could offer invaluable insights into the organization’s strengths, weaknesses and position within the industry. Moreover, an efficient quality assurance system could be the ship manager’s best defence against criticism, forced compliance and over-regulation. Most new regulation came about as a reaction to perceived deficiencies; by taking a proactive stance, ship managers could endorse appropriate regulations rather than waiting for legislation to be mandated.

How was management’s commitment crucial to the success of Eurasia’s TQM effort? This is a tremendous human resource challenge to ensure that people have a certain set of values, because it is the values which mould perceptions and perceptions mould attitudes. Attitudes mould behaviour; behaviour moulds actions and actions mould results. So if we want consistency…a predictable result, then we have to start from the bottom of the chain – that is the values, and if we can get the values right in each one of our floating factory’s staff, then we can expect a predictable result. Rajaish Bajpaee, President & Group Managing Director, Eurasia International) A lack of management involvement is often cited as one of the leading reasons why TQM efforts fail. Management must do more than simply instruct the rest of the organisation to implement quality control mechanisms. The amount of time a senior manager dedicates to quality issues is readily observed by employees and reflects the organisation’s actual priorities.

As Eurasia’s President, Rajaish Bajpaee was tasked with the responsibility of adding value to key constituencies, and he held the firm belief that customers ultimately determined the organisation’s fate. In leading Eurasia’s TQM effort, Bajpaee was intimately involved in defining the need for change and developing new visions and the frameworks needed to mobilise commitment. Leadership entails the ability to articulate those visions and oversee the process of evolution through which the organisation learns new ways and methods.

The increasing amount of inadequately treated industrial wastewater and non treatment of municipal wastewater has created huge demand for superior and cost effective equipments and technologies. The feeble treatment efficiencies of wastewater, rising awareness about environmental dilapidation, and greater water requirements represent abundant growth potential for the wastewater treatment equipment.

The Indian wastewater treatment equipment observes increasing adoption of Membrane Fabricators (Mbps) in both Municipal and Industrial Wastewater Treatment. The industries and municipal plants have started using membrane fabricators as against the conventional treatment method. The better effluent quality and less operational cost are factors which have led to increased adoption of Membrane Fabricators. Apart from Membrane fabricators the demand for other equipments such as blowers, belt press, Clarifies, Diffusers is also increasing.

It is anticipated that the demand for Digester might increase in coming two years as the country will progressively adopt the concept of sludge recycling. There is also increased demand for Evaporators, due to Zero Liquid discharge exultation set by the Indian government. Membrane fabricators employ the membrane technology where a barrier permits the passage certain constituents while preserves other constituents. These equipments therefore make use of membrane processes such as incrimination and ultra filtration with a device called fabricator.

The major driver of the Mbps in India during recent years has been the shortage of clean water. “The future growth of the Mbps’ market in India would major depend upon factors such as cost, life and energy consumption. With the growing centralization of his technology in the country the costs have declined over the years. Additionally, the membrane life is also considered to exceed around 10 years and they are increasingly becoming more energy efficient. – According to the Market Research Associate, Ken Research. The report “India Wastewater Treatment and Management Industry Outlook to 2018 – Rising Demand for Superior & Cost Effective Technologies” provides detailed overview on the Wastewater Treatment and Management Industry of India. This report helps reader to identify the ongoing trends in the industry and anticipated growth in future pending upon changing industry dynamics in coming years.

The report will help industry consultants, water and wastewater companies, equipment manufacturers and other stakeholders to align their market centric strategies according to ongoing and expected trends in future. India Wastewater Treatment and Management Industry Research Report By Snatcher http://www. Snatcher. Com/energy-and-utilities/clean-technology-industry-/India- wastewater-treatment-market- research- report/480-103. HTML Contact Person: Ankara Guppy E-mail: ankur@kenresearch. Com

The Futura industries are aluminum industries that are mainly involve in mining and purification processes of aluminum. The president of the company has come up with the perspectives that have improved the financial positions of the industries, this has been achieved through achievement of growth through learning and good management practices. Importance of learning in an organization:

One of the major reasons of introducing learning is to improve the financial positions of the company; these is achieved when workers are trained and they to bring developments, workers gain skills in the process and are empowered in such a way that brings growth in an organization. Improved skills will result into increased productivity of each worker and as a result there will be increased productivity.

Stake holders gain from improved productivity in the organization, when stakeholders earn more there will be an incentive for more investors to join the industry, increased investment into the industry will result into increased growth and development of the industry. Increased productivity of workers will also lead to reduced production costs, workers are more productive and therefore produce more goods, when this happens there will be a reduction in the final price of these goods and the consumers will benefit in the process.

Due to learning also there will be increased quality of goods produced and the beneficially in this case will be the consumer of the good. Experienced workers will also reduce losses in an organization, workers will need less supervision and therefore supervision costs will be reduced, when an organization reduces its production costs it becomes more competitive.

Economies of scale will be realized by the industry asd workers gain more skills through learning, there will be improved efficiency and effectiveness within an organization which results to internal economies of scale, as a result the cost of production will be lower than the competitors and therefore the organization will under price its competitors increasing demand for its goods. Analysis The main measure of success is the heavy agro industry investments.

This is as a result of attracting a large volume of investors into the industry, when the company increases its services by improving the rate of productivity the final products will be of high quality as a result more investors will be willing to invest, Futura industries will also invest through establishing more firms in the same region which will also be advantages associated with area such as the existence of infrastructure. In order to ensure the proper learning and the growth of the company, there have been different methods of improving performances.

This has been done through employment of qualified workers in the mining stage and the final stage of designing. They have employed workers who are well experienced and who are able to face challenge. Also they have employed skilled managerial staffs who are able to manage the company well. On the other hand the industry staff has introduced latest technology which is evident from introduction of modern equipments which help in improving productivity.

These equipments have greatly facilitated the production process especially the mining process, workers are able to extract aluminum and also produce pure aluminum that does not contain particles. In the other stages of extraction and refining the process is the same in terms of efficiency and ensuring the final products are of high quality. The workers are assured better working conditions; this is done by providing them with safety equipments and also clean environmental conditions.

This ensures that the workers are work under on the good conditions reducing risks of accidents and ailments. Employees now work effectively without any risk and improve the health of the workers reducing on health expenses incurred by the organization. Conclusion These measures captures the full dimensions which helps an organization to become more productive, the operational process ensures high rate of production of materials which are of high quality.

When well applied the industry goods will get to the market at low prices and this will attract more customers and investors. More investors will be attracted due to high profits gained in the industry and more investment means growth and development of the industry. More investment will also mean the expansion of the production process and therefore increase employment, finally the consumer will benefit from the low price yet high quality products.

References: Johnson D. (2003). The balanced scorecard at Futura Industries. , Strategic Finance, 85(1), page 36 to 42

This study aims to understand the competitive environment of some of the main retailers within the UK market and to demonstrate the different elements of the e-environment that impact on the retailer’s business and marketing strategy. Furthermore this study will assess the impact of many factors and constraints surrounding the e-retail industry and specifically the grocery sector of the retail industry.

It is known globally that the UK has the most developed grocery e-tailing sector in the world and that is increasingly appearing specially after the failure of many business models which have adopted the internet for distributing and selling there products

This study will exclude B2B sector and will focus on B2C sector in the retail market

I will be focusing on the online grocery market and the main British players leading this market.

I have selected this industry because recently, it has caused a noise globally, and many interested people are wondering whether this industry has reached the mature level or it is still growing or it is only a noise which will lose its importance later.

The UK Grocery Market

it is estimated that �105 billion of groceries are sold in Britain each year, (MINTEL Nov, 2002) , that shows a noticeable increase in sales over the period since 1999 until the end of 2002.

The Total retail sales through specialist and non-specialist food retailers were worth some �90 billion in 1999 and many specialists predict this market to continue growing to reach 120 billion by 2005 (MINTEL, Nov. 2000)

Within the food market itself, fruit and vegetables represent the largest market, with high demand within the sector for fresh produce.

Convenience foods – fresh and frozen ready meals – are also highly demanded, as are products which generally fit well with the needs of the much maligned ‘cash rich and time poor’ consumer. Key debates within the market surround the use of genetically modified (GM) produce, and this has helped to create niches in the retail market for suppliers of GM-free or organic ranges. The major supermarkets have been moving quickly into the organic sector, in which higher margins can be found. (Key Note)

The UK grocery market is driven by economic factors, population structures, household size employment pattern and lifestyle patterns whose impact is shown below as macroeconomic factors:

Economic factors – Although consumer expenditure is predicted to continue to grow by 12.6% to 2004, with personal disposable income expected to also grow steadily, it is unlikely that this will impact strongly on spending on food for in-home expenditure; As personal wealth has grown, spending on food has decreased as a proportion of total expenditure, with leisure activities, including eating out, taking most of the surplus. Some premium categories of food, such as organic produce, will benefit. As a result the focus of promotional strategy is moving away from price competitiveness towards other aspects of the retail offer.

The population structure – Food expenditure and the overall market size is directly related to the size of the population but the long-term outlook for the British population is for very low growth, implying that the food retailing sector is likely to find domestic profits hard to grow.

Household structure – Over the period 1999-2004, an increase of 830,000 (3.4%) (MINTEL, Nov 2000) household is anticipated. This is due to factors other than an increase in population; the growth is coming from one- and two-person households, due to rising divorce and separation rates, getting married later or not at all and the elderly living longer These trends disrupt the economic logic of the superstore model which is designed to offer large families convenient means to buy large volumes of food in one place, relatively infrequently, during the daytime, and to transport that shopping home by private car.

Yet only 20% of adults have children under 16 living at home with them. All the major grocery retailers are competing to grow their share of this crucial segment of the population.

Smaller households equate to more frequent shops for a few items at a time, often at unsociable hours, a considerably more expensive retailing proposition.

Changing employment patterns and practices, with increasing frequency of part-time working, mean there are fewer families in which one partner has the time to shop at relative leisure during the day, and more for whom shopping is a shared duty, carried out whenever busy schedules will allow. In turn, time-pressured shoppers will often want to use a variety of shopping patterns according to circumstance, with retailers being required to offer more channels to market in order to compete. This cannot be done without cost implications.

Changes in consumer tastes and lifestyles have an influence on grocery demand patterns. Healthy-food fashions and food-safety scares cause people to change what they eat, while there is a strong trend towards snacking and convenience eating – which involves an increasing proportion of food being bought through channels other than grocery retailers.(MINTEL)

Internet adoption in the UK retail Sector

Retailers generally begin on-line activities by providing information and interactive communication. Their site may develop into an electronic shop almost mirroring their offline activities

A study by the department of trade and industry (DTI) called, ‘E-Commerce Impact Study: Retail Overview’ (www.dti.gov.uk 29 July 2002) shows that:

More than 75% of retailers are adopting e-business technologies,

Nearly a quarter of retailers surveyed, and more than 56% of micro firms in the convenience store sector, have not thought about the benefits of the e-commerce.

This report provides a detailed look at a number of key retail sector, and shows how UK retailers are getting to grip with e-commerce and that modern technologies are helping to change the way they do business.

The report mentioned that:

• 77% of companies are adopting e-commerce technologies
• 71% of businesses use external e-mail
• 53% of firms have a website

More British food shoppers have converted to online grocery shopping than in any other country. However, Internet sales still represent a tiny, although growing, percentage of the overall UK grocery market. Most people use the Internet as a way of gathering information on products and making price comparisons before visiting their local store.(Key Note)

Despite these statistics are showing quite positive numbers, some experts and specialists state that this field needs further research to determine the extent to which the web is likely to promote long term changes in the retail sector .

In the UK online market there are four main grocery retailers dominating the market those are (Tesco, J Sainsbury, Asda, and Iceland.co.uk)

According to the researchers the UK leads the world in online grocery shopping. “Chains like Tesco and Iceland have been much faster than their US counterparts in exploiting the immense potential of new virtual shopping markets.” They estimate that the online grocery market is already worth �200m a year and will reach �1bn within two years.(Guardian Friday February 4, 2000 )

The online grocery market is characterised by many of the features of the traditional grocery market. Big supermarkets have woken up to the Internet as a distribution channel and are gearing up to dominate the market. Smaller suppliers, using the Web as another side of their portfolio, are sure to lose out in this area. Smaller niche suppliers make up a large element of the market in terms of numbers of firms. In fact, there are so many companies, many of which operate on a very local delivery basis, that it is almost impossible to calculate their actual number.

MARKET SIZE

Online shopping grew 19 times faster than traditional brick-and-mortar retailing in December 2002, and increased a further five percent in January 2003 to represent six percent of all UK retail .(www.nua.com)

Various reported predictions suggest the online grocery market will be worth around up to 10 % of 120 billion which is the predicted grocery market size by 2005 (MINTEL Nov, 2000)

The current size of the UK online grocery market has been estimated to be worth �1.2bn. (Key Note 2001), while Tesco reported 446 million sales during 2003.

Sainsbury’s the second market leader announced annual sales of �110 million during 2002 (MINTEL Mar 2003)

More than half the UK population will have bought something online by the end of 2003. Online shopping will represent 7% of all retail sales in the UK, accounting for �2 billion a month.(MINTEL Apr 2003)

The total size of the UK grocery market has been estimated at �100bn per year. To support the market, the UK has 5.9 million online shoppers, growing to a predicted 8.5 million over the next 5 years �500m of turnover, that suggests that average spending per user in 2000 was in the region of �83 per head, suggesting that the Majority of users are not regular consumers of online services.(Key Note)

Market size is difficult to determine, as figures for turnover from Internet sales are often included in total sales figures. Companies that are struggling to perform in the market may be taking a rather flexible view in how they present figures that may disappoint shareholders. However, Key Note’s assessment is that the size of the true online market is currently �465m (lower than many estimates suggest). Within this, Tesco claims 64.5% of the market, Sainsbury’s 9%, ASDA 7.5%, Iceland 4.7%, , with the balance held by a range of independents, small suppliers and niche companies.

ECONOMICAL FACTORS

The innovation in information technology (IT) and new business practices facilitated by IT are forming a “new” economy, Electronic commerce and the IT innovations fuelling it are supposed to be fundamentally changing the logics of business practice, forming new social realities, and new business models. Traditional “old economy” firms and organizations are busy building bridges to the new economy.

A stable rate of economic growth is one way in which the Government hopes to guarantee macro-economic stability, which can assist firms when assessing the risks associated with innovative practices. This, combined with the factors outlined below, has an influential effect on the rate of growth of the online grocery market.

Low Cost of Internet Access

One of the main drivers encouraging the use of Internet access and e-grocery in the UK is the relatively low cost of time spent online.

The UK is the cheapest off-peak location in the world from which to surf the Internet, peak rates have has been dropped. This advantageous position benefits consumers, and the state of competition within the market is strong, with a large number of good quality Internet service providers (ISPs) available and eager to serve the public demand.

Levels of Disposable Income

The greater the levels of PDI consumers have, the more likely they are to be tempted towards higher margin products. Such high-margin products can make the difference between a profitable online transaction and a loss-making one.

European Currency and Simplification O European Trading Laws

The advance of the European currency and the simplification of European trading laws will mean that Consumers will find it increasingly easy to trade with European retailers. The Internet offers International retailers a great opportunity to attack the UK marketplace.

British shoppers are already prepared to go Euro to get what they want online.

“Big brand names are in the best position to immediately exploit e-commerce but if they don’t start moving soon the threat from foreign competition is real.” (Jolanta Pilecka, E-commerce Marketing Manager, Hewlett-Packard).

In future a number of important factors might affect the economic state of the UK and inevitably supermarkets. The first is the possible introduction of the Euro. The Euro has been introduced in various European countries, but most notably France. The introduction of the Euro in France has pushed up weekly shopping bills for the average French household by 10 per cent. Could the same be expected to happen in Britain should the Euro

SOCIAL FACTORS

To know the barriers to consumer online purchasing adoption it is useful to understand the different factors that affect the level of internet access. Value proposition ease, Security and fear of unknown are the main factors affecting the internet adoption (Chaffey)

Over the period July to September 2002 an estimated 11.4 million households in the UK could access the internet from home, that amount 46 percent of all households. This is over twice the number three years earlier and is an increase of 7 percent from 39 percent reported in the third quarter of 2001. (www.nua.com )

Evidence suggests that household formation will continue to grow, but that the profile of home size as mentioned at the first of this paper will stay strongly biased towards homes with one or two people.

An estimated 62 %of adult in the Great Britain have accessed the internet some time according to figures from the October 2002 national omnibus survey. This is equivalent to approximately 28.6 million adults in Britain having accessed the internet. In the month prior to the survey 52 per cent of adults had accessed the internet.

Differences between the countries and regions of the UK

Levels of access vary greatly between different parts of the UK. In October 2001 to September 2002 the proportion of households with access was lowest in Northern Ireland (30%), Wales (31%) and the West midlands (34%). It is noticeable that the proportions were highest in the East of England (52%), London (50%) and the South East (50%) were around half of households had access to the internet.

Legal and ethical concerns

It is argued that people do not change as quickly as may be believed. They still do not like parting with personal details, especially to those that they do not trust. Firms that request data from consumers need to make supplying information optional and allow users to change and delete the information provided. Crucially, they need to convince consumers that they will treat all information confidentially. Firms that are recognised as ‘good citizens’ and with a high reputation in this regard are well placed to ease the anxieties of consumers scared of fraudulent use of details. Smaller companies with an Internet-only presence will find it hard to build up this trust.

TECHNOLOGICAL FACTORS

E-retailing can be seen as an innovation in retailing that in turn is built around a technological innovation

Many reports have summarized technological problems as: The complexity of the user interface bandwidth restrictions and access connection speeds and security concerns

A wide range of new technologies have enabled companies to create

better and more efficient relationships with consumers as e-retailers:

•  provide more information in the pre-shop experience;
• increase the number of access points to meet customers needs;
• offer a wider choice of products than can be held in-store; and,
• improve the overall service provision, for example through better stock management. www.gnn.gov.uk

Technological breakthroughs are some of the key drivers in building the right conditions for online grocery to thrive.

The main technological factors influencing the market include:

• � The expansion of broadband Interne
• � The introduction and growth of DTV (digital television)
• � M-commerce (mobile-commerce) and WAP (wireless application protocol) phones
• � Automated reordering systems
• � Systems offering defence against fraud
• � Automated customer service.

Broadband Internet

One of the problems many consumers have when dealing with the Internet is the speed of access. Many consumers connect using 56K modems, although the majority never achieve this speed, perhaps because they live a great distance from the central phone-exchange routes or because their phone lines are too old. Broadband connections can alleviate this problem.

Broadband connections come in two basic types: digital subscriber line connections (DSL) and cable modem connections

In the first quarter of 2001, the number of DSL lines grew by 90% in the UK This market is likely to experience high growth in the coming years.(www.itu.int)

Digital Television Advancements in television are running parallel to other Internet-enabled technologies 4.4 million households had DTV in 2000, and the figure is now probably in excess of 5 million. Not all DTV services are fully Internet-enabled, but there are plans to achieve this. The growth rate in subscription to DTV services is believed to be higher than the rate of new subscribers to ISPs. It has been suggested that more than 45% of homes will have digital satellite TV by 2008 (generating revenues for the communications companies of �2.4bn per year).

One of the major barriers to e-grocers is the high costs charged to the suppliers by the DTV companies. Tesco reported to have found Open Digital’s charges too expensive to make a venture worthwhile, however, the majority of the large supermarkets are signing up to the service may have very severe consequences in the long term.

M-Commerce and WAP Phones

M-commerce for all markets in Europe is forecast to reach levels of around $38bn by 2004.(Key Note) with over half of European companies planning to offer some form of service via mobile phones (particularly in the banking and service sectors). Major multiples are increasingly active in the service sector, and their online successes in other areas could well spill over into m-commerce activities, Mobile communications company Ericsson has estimated that, by 2004, there will be more than 600 million people using mobile Internet services in Europe.

In 2000, the market for subscriptions to mobile-phone services grew by 67% and by 84% in 2002 .(www.itu.int ) However, WAP phones, currently the only method of accessing Internet via a mobile, have been relatively slow to catch on in Europe and make up only 15% of overall handset sales globally.

Automated Re-ordering Systems

All the technologies so far discussed require a conscious effort on the behalf of the consumer. In the future, it is possible that automated re-ordering systems will mean that the retailer is automatically notified when products are being used up within the home and need replenishing. There are two enabling technologies currently under development that may make this less fictional and more everyday. Vendor managed inventory (VMI) is one of these technologies.

Another enabling technology in the same area is radio frequency identification technology, also known as RFID. This improves on VMI by using radio waves to scan all products in the fridge at any one time.

Those kinds of technologies build and grow up the relationship between the consumer and the supplier learns more about the consumer behaviour to satisfy his demand

Also they can create a competitive advantage for the business

Systems Offering Defence Against Fraud

Concern over fraud continues to scare many consumers away from using the Internet as a route for purchasing items and services.

Credit-card companies are already making changes to their services to ease these concerns, but longer-term solutions may be found in encryption technology.

Technology is being developed that adds digital signatures to a purchaser’s Web browser which may help fight fraud.

Such services can only be developed and provided by strategic partnerships between online retailers and Web security corporations such as Inktomi, Ariba, Broadvision, Vignette and Verisign (all leaders in secure-payment processing solutions).

INDUSTRY ENVIRONMENT

Porter’s 5 forces analysis

Michael Porter’s five forces is The model that widely used for competition analysis in business strategy formulation, states that an organisation exists within an industry. To succeed it must deal with the competitive forces that exist within that industry:

(1) Entry of new competition.

(2) Threat of substitute products.

(3) Bargaining power of buyers.

(4) Bargaining power of suppliers.

(5) Rivalry amongst existing competitors.

THE GROCERY E-TAILING MARRET

As an industry in the early stages of its life cycle, the online grocery market is currently very fragmented, with a growing number of competitors. The reasons for this fragmentation lie in several factors: relatively low entry barriers, high transportation costs, the perish ability of grocery items, nontradable goods and services industry, and the ability to specialize in geographic regions and reap the benefits of economies of scale. Much like traditional bricks-and-mortar supermarkets, online grocers are highly localized except for a few that operate nationally or internationally by delivering only non-perishable goods. (Success factors)

Barrier to entry

Compared to building traditional supermarkets, the barriers to entry in the online grocery market are relatively low, since most online grocers are localized. Set-up costs include establishing the computer system, creating logistics and warehousing capabilities, building brand awareness, and having the necessary alliances with local grocers in place. Many online grocers have already established partnerships or alliances.

Entry into the industry is currently relatively easy, because no one has inherent advantages.

Innovation and competitive moves, which can be easily replicated, have not prevented new firms or substitutes from entering the market. However, entry barriers may rise in the future as consolidation likely occurs.

Market such as groceries, barriers must be built on differentiation through brand recognition by achieving superior customer service and responsiveness. One attraction for the recent surge of Internet startups in the grocery business is that online grocers require less capital and have lower variable costs than bricks-and-mortar stores. Fixed costs are high, but the potential for big returns is great if a large sales volume can be generated.

Exit barriers can be moderate to high, depending on the amount invested in logistics and warehousing, the Web site, computer systems, and marketing.

PPOWER OF SUPPLIERS

Retailers have high bargaining power when they purchase a large volume of goods from their suppliers. Unlike huge supermarket chains, the smaller online grocers typically possess a lower level of bargaining power than their suppliers. But traditional grocers that decide to branch out onto the Net have the advantage in this regard, buying in bulk and enjoying established relationships with suppliers and customers. This allows them to price their goods competitively, deterring new entrants or forcing inefficient incumbents out.

POWER OF BUYERS

The bargaining power of buyers or consumers is very high in this industry. With many substitutes and competitors to choose from, dissatisfied customers can simply switch to a competitor. Groceries are commodities, so consumers can be sure to purchase the exact same products elsewhere.

THREAT OF SUBSTITUTE PRODUCTS

The threat of substitutes is undoubtedly high for two reasons:

Firstly, the products and services offered online to customers are extremely similar. So similar in fact that supermarket’ often have to lower their prices to give them more appeal.

Secondly although there is a certain degree of brand loyalty, it can’t be relied on, as customer loyalties tend to change when they find they can obtain better value for money elsewhere. E-grocers understand that the threat of substitutes is high, and this then is the main reason for supermarkets branching out and pursuing a broader product line, as a means of calming the intense competition with their competitors. However, in pursuing broader product line grocers open themselves up for further competition from experienced players in other non food retail markets.

RIVALRY AMONGST EXISTING COMPETITORS

Competitors will do everything in their power to increase their market share. Supermarkets also have high fixed costs due to the sheer number of stores they have open. They must make a sufficient amount of sales to cover their costs and generate profit.

As discussed earlier there are a variety of substitute products and services that are becoming increasingly difficult to differentiate thus custom is very much determined by price. This situation is further aggravated because switching costs are difficult to impose, as food is an everyday necessity, many customers will happily forget any loyalties if they really need to obtain it.

Conclusion

The environment in the online grocery industry is growing more and more competitive as new firms continue to enter.

Grocers which established its online purchasing site first is gaining the benefits of the first-mover advantages such as Tesco.com

E-grocery has become a considerable industry sector each main player in this industry is trying to create a competitive advantage to attract more numbers of spoiled customers trying to satisfy there demands.

The UK e-environment is one of the best e-environments globally that ease the entrance to this industry and generate the potential for more and more customers to buy grocery on line.

This industry sector is a quite new industry that makes the flow of information about its success and pitfall factors relatively not enough to know every factor influences this industry

We can’t say that e-grocery sector has reached the mature level since there are more and more numbers of customers and rivals are entering this sector.

They also own the North Eastern Co-operative. Dignity has Just over 500 branches and conduct 75,000 funeral a year. Between these two companies, they are currently involved in over 25% of all funerals in the I-J. There are several other large groups with large numbers of funerals homes. Targeting customer needs by the Coop Funerals In evaluating different market segments, the Coop Funerals has considered three actors, segment size and growth, segment structural attractiveness, and company objectives and resources.

After evaluating different segments, the Coop Funerals has decided which and how many segments to target. Target markets consist of a set of buyers who share common needs or characteristics the company decides to serve. The Coop Funeral Care serves all population age groups, in assisting with Funeral arrangement for the deceased. On its website it state that it offers support to the decease’s relatives when someone dies, in hospital, at nursing home, abroad, or unexpectedly.

In addition to these services the Cooperative Funeral Care also sales funeral cover for to I-J families. Because buyers have unique needs, wants and expectations, Coop Funeral care could potentially view each buyer as a separate target market. There many different factors in which relatives, insurance companies, or local authorities take into account when choosing a funeral home for the deceased. These factors may include quality, perception, reputation and financial. Funeral are personal and unique, it appears the Coop Funerals view each buyer s a separate target market.

There are four different target market segments and we shall now examine the Coop Funicular’s target market strategies in turn. Undifferentiated marketing Differentiated marketing The funeral market is differentiated by different factors which ultimately play a role in the type of funeral, burial or cremations to be chosen by the deceased through funeral policy, the decease’s family, local authority or insurance firms. The key factors include religious beliefs, life style and can also be influenced by the economic actors for example the economic downturn.

The Coop Funerals offer different products for different market segments for example they sale funeral care insurance plans to specific group of customers, they also offer religious funerals to cater for certain religious groups , they can conduct funerals on behalf of other insurances companies individuals. They can also cater for individuals and can conduct funerals Funeral Care Industry By preconceiving segments, The Coop Funerals hope for higher sales and a stronger position within each market segment.

What Role has the Insurance industry In Economic development? The insurance industry has come a long way from ship owners, merchants and underwriters gathering in Edward Lloyd’s coffee house in London to discuss their marine voyages to new colonies of the British Empire. Over the years, Insurance has become essential in our everyday lives. Something we just can’t live without. Our Economics and Societies are growing phenomenal rates and have become more and more interconnected on the rest of the world, the risks exposed to us become more unpredictable and hazardous.

The need to protect against unfortunate events has been around as long as human beings existed. Individuals have always recognised their need to alleviate risks that have the potential to ruin the. At the dawn of modern history, widely dispersed groups of tightly knit hunter-gatherers, relied almost exclusively on clan relatedness as their only bulwark against the ever-present risk of death, debilitating injury and starvation.

For those early ancestors, the concept of risk always existed, exclusively in terms of the physical persons of individuals, mitigated by the guarantee of personal and kin relationships, rather than objects and possessions. (Buckham et al 2011, pp. 1-9). According to Lopez and Raymond 1967, in antiquity, a sea loan was the first sign of transferring risk. A number of German and Italian jurists have regarded it as something close to insurance. It involved a ship owner promising to transport goods belonging to a merchant and at the same time providing a loan, somewhat of a guarantee.

If the ship and the goods arrived safely to its intended destination, the merchant returned the loan but if they didn’t arrive safely, the loan was not returned. From its origins in ancient times, the insurance industry has evolved into an essential service in our society and a “key component for economic development” (Liedtke 2007). Our lives are progressing rapidly, there is a significant increase in the general population, technology and science is continuously maturing and the world is becoming smaller.

The insurance industry is now faced with challenging obstacles through “the liberalisation of insurance and capital markets, changing demographics, volatile stock markets, the shifting of climate patterns and the rising numbers of natural and manmade disasters and subsequent losses” (Ayadi and O’Brien 2006). “The global risk landscape is growing and the size of potential losses is continuously increasing” (Coomber 2006). Society has progressed significantly from ancient times and our need of insurance has drastically transformed accordingly.

The increasing sense of ambiguity and uncertainty in our lives regarding our future economic prosperity and the devastating impact of catastrophic events has certainly reinforced the need for insurance to shield us against new and emerging risks. This paper asks the imperative question: What role has the insurance industry in our economy development? The Importance of the insurance industry for an economy can only in part be measured by the sheer size of its business, the number of its employees in a given country, the assets under management, or its contribution to the national GDP.

But insurance is not just about employment and the financial compensation of Victims. It actually plays a more fundamental role in the workings of a modern society, it creates huge capital assets. Due to the nature of insurance contracts which usually involve long time periods, money coming from insurance, usually stays in the financial market of a given economy for quite some time. It is not a fickle investment capital that rushes around looking for quick gains, it is oriented toward the medium to long term. It creates a stable environment by allocating assets according to market forces where needed (Liedtke 2007).

There are six main areas where the insurance industry fosters economic growth. I will now go into detail on these six areas (CEA 2011). Private insurance improves firm’s financial soundness: Insurance allows firms to expand and take on economic risk without the need to set aside capital. If a firm did not have adequate business insurance cover this could be harmful particularly for small firms. Small firms have limited capital and have difficulty in accessing financial markets which make them particularly vulnerable to adverse events.

Without insurance large contingency funds would have to be in place to protect firms against risk. For most small firms this would represent more capital than they presently employ which would not be viable for most small firms and this would lead to a reduction the population of firms. Fostering entrepreneurial attitudes, encouraging investment, innovation, market dynamism, and competition: To be innovative you have to take risks. Since entrepreneurs just like ordinary people are characterised by risk aversion, the willingness to take risks can be considered a scarce resource (Kugler and Ofoghi 2005).

More will be produced if greater risk is taking. Well developed insurance markets contribute to the development of an economy by helping to optimise the allocation of the scarce resource of ‘risk taking’ by moving it from a conservative to an innovative and high profits activities. On the other hand uninsured firms are very conservative and generally do not exploit new business opportunities and invest less in innovation and their degree in the global markets is low. Offering social protection alongside the state, releasing pressure on public sector:

In all industrialised countries a major problem is not too far down the line. Due to improvements in healthcare and quality of life population’s structures in industrialised countries are changing where people are living a lot longer and at the same time the birth rate has also decreased. People are also expecting to receive a high level of healthcare, pensions, unemployment allowance and other social benefits. This raises great concern as public expenditure will be put under huge pressure and will lead to significant decreases in economic growth.

The role of the insurance industry is vital to provide an additional pillar alongside the protection supplied by the state. Insurance products like payment protection insurance play a vital role in protecting household in times of unemployment in an economic downturn. Many industrialised countries such as the United Kingdom provide free healthcare to its citizens. In the future what we are going to see is the health system in these countries being privatised and individuals buying private health insurance. Currently 47% of the Irish population have health insurance (Nolan 2006).

Similar systems will have to be introduced to the pension systems. These measures will help reduce government expenditure on these areas and in the long run help with the development of the economy in the countries. Enhancing financial intermediation, creating liquidity and mobilizing savings: Insurers are massive institutional investors in the economy with over 11% of worldwide assets in 2007 (Munich RE 2007). They therefore see benefit in the development of a modern , competitive financial market that facilities firms access to capital and offers a wide range of investment opportunities.

In this respect insurance companies look favourably upon initiatives taken by governments to ensure shareholder rights and to maintain high standards of corporate governance. Promoting sensible risk management by firms and households, contributing to sustainable and responsible development: Insurers risk assessment is reflected through in price and policy conditions. In this way they offer firms and households an indicator of their level of risk. Firms and households in can take action to reduce the risk by engaging in risk management.

Risk management is the process of gauging or accessing risk and developing strategies to manage it (Squiddo 2012). Therefore by means of risk pricing insurance encourages sensible risk management. Both the client and the insurer benefits from sensible risk management as the client’s premiums are reduced and the chances of the insurance company having a claim are also reduced. This process influences investment decisions and thus contributes to the development of the economy. Fosters stable consumption throughout life: Consumption is the main driver of economic growth as its accounts for over 80% of GDP.

By having insurance it offers lifelong financial protection and allows stable consumption throughout an individual’s life. * Insurance for house and other damages allow individuals to secure assets in case of an adverse event. * Liability insurance covers household for damages that might occur to other people. * Life insurance protects relatives in the event of a death and also provides financial support in retirement. * Health and accident insurance provides cover when it is needed most. * Credit insurance eases consumption but does protect against excessive debt through pricing and acceptation policies.

Another new phenomenon in the insurance industry is Micro insurance. It aims to alleviate poverty, distribute products in new ways and create sustainable financial growth for individuals, families and small scale businesses in underdeveloped countries. The need to provide insurance products is vital if their economies are to develop. People in underdeveloped countries are most at risk to adverse events and they have a significant negative impact on their lives. When a hurricane, flood or other adverse events occur and their homes are destroyed or their livestock is wiped out, these people have no financial compensation.

These communities have to start from scratch. Insurance companies recognise that the poor require a range of insurance products that meet their needs. Zurich was an early mover in micro insurance, when it started its first micro insurance programme in Bolivia in 1999. It hasn’t been an easy move due to a lack of trust and confidence by people in underdeveloped countries but if these problems can be resolved there is huge potential for growth in the market and also for a dramatic improvement in economic development in these countries (Pope 2011).

Conclusion: When we think of economic development, most attention is devoted to the relationship between the financial markets and economic development with insurance only receiving a passing mention. However in recent times there have been several interesting lines of research into the role the insurance industry plays in economics development. I have shown in this paper how the insurance sector plays a fundamental role in the development of our economy and without insurance we would live in a world that would be less economically developed and much less stable.

Insurance supports research and development, innovation and new technologies, it supports economic stability and sustainable growth and also supports the sustainable use of resources and helps modernise social protections systems. The evidence suggests that there is substantial potential for the insurance industry to make a greater contribution to economic growth especially in lower and middle income countries. Currently insurance lags behind financial services in the extent of globalisation, but if we can continue to expand the insurance industry we will see substantial growth opportunities.

Bibliography Ayadi, R. and O’Brien, C. (2006) “The future of insurance regulation and supervision in the EU: New developments, new challenges” Buckham, D. , Wahl, J. and Rose, S. (2011) Executive’s Guide to Solvency II, United States of America: The Wiley and SAS Business Series. Coomber, J. R. (2006) “Natural and Large Catastrophes– Changing Risk Characteristics and Challenges for the Insurance Industry”, The Geneva Papers, 2006, 31, (88-95) Kugler, M. and Ofoghi, R. (2005) Does insurance promote economic growth? Evidence from the U. K. University of Southampton Paper, July 2005. Liedkte, P. M. (2007) “What’s Insurance to a Modern Economy”, The Geneva Papers, 32, (211-221) Lopez, R. S. and Raymond, I. W. (1967) Medieval Trade in the Mediterranean World: Illustrative documents translated with Introductions and Notes, New York: WW Norton & Company Inc. Nolan, B. (2006) “The Interaction of the Public and Private Health Insurance: Ireland as a Case Study”, The Geneva Papers, 31 (663-649) CEA (2011) “Better off in Europe: How the EU’s single market benefits you”, available: http://ec. uropa. eu/publications/booklets/move/56/en. pdf Munich RE(2007)“The fundamental role of insurance”, available: http://www. genevaassociation. org/Portals/0/COP15_Munich_Re_presentation. pdf [accessed 25 October 2012] Pope, C. (2011) “Do we really need Private Health Insurance”, The Irish Times, 24 Jan, available: http://www. irishtimes. com/newspaper/pricewatch/2011/0124/1224288161882. html Squiddo (2012) “ Principles of risk management”, available : http://www. squidoo. com/the-principles-of-risk-management [accessed 26 October 2012]

There exists huge competition among the top few players who dominate the market and that results in low margins. These players are constantly focused on advertising, branding their products and strengthening their distribution network by increasing dealer network so as to increase their market share. Inputs in Tree: The industry is highly intensive with the Raw material Consumption. The Raw material costs accounts for 65-70% of the total production cost of tires. Natural rubber constitutes is the major raw material for the product and is used by the industry which accounts for around 43% of the total cost.

The other raw materials consumed by the tree industry are crude derivatives such as carbon black, rubber Heimlich, synthetic rubber and nylon tree cord fabric, Therefore, rising crude oil prices increase raw material costs and affect the profitability of the company. Based on the customer segments, the tree market has been broadly divided into 2 categories: Original Equipment Manufacturers (MOM) Replacement Market. 1) Original Equipment Manufacturers – This includes automobile manufacturers like – Hero Honda, Data Motors, Amaranth Suzuki etc.

The demand from the MOM market fluctuates directly in line with end-use demand for the automobile/construction equipment segment; hence prone high degree of cyclic variation. The total tree sales to Memos are on an average 40-45% of the total sales. 2) Replacement Market – These are the end customers who replace old tires of their vehicles. This demand depends on factors such as vehicle population on – road, road conditions, overloading norms, miles driven. This is less cyclical than MOM demand and is generally provides higher- margin business for manufacturers.

The replacement market accounts for 45-50% of the total sales. Ratification Carters: Retaliation of Car tires has brought a significant change in the industry. In the Passenger Car market, Retaliation has reached 98. %. These tires have their cords running radically from bead at 90 degrees angle to the remover long the outer surface of the tree. Reinforcing mediums that are used in these tires are nylon, polyester, fiber glass and steel. These tires are generally 20. 0% more expensive than the Bias Tires. These tires have longer life and provide greater fuel efficient and better Road Grip.

Due to The poor road condition of Indian roads the penetration of radial tires in India (nearly. O%) as compared to global trend behoove. O%. The Radial tree cannot be retreated and the only option is replacement. This has changed the way the Replacement market works. This has also led to an increase in sale of the car tires in the replacement market. As services such as retreating are not possible we see a greater bullwhip effect in the supply chain. Competitor Analysis:- There are many players in this industry fighting for the same space.

Due too lack of high product differentiation this product operates similar to a commodity. Using the rule of top 3 we have chosen the below companies to analyses the completion in this market. PASSENGER CAR I COMPANY I MARKET SHARE I APOLLO | | MR. | | 119% I BRIDGETOWN We have used the Potter’s five forces analysis in order to explain the market and threat and strengths for any industry in this particular field. Madras Rubber Factory (MR.): History: – MR. Ltd. ‘s one of Indian’s largest manufacturer of automotive tubes; Tires.

It was incorporated as private limited company minion in order to take over the business of a partnership firm which was called c the “Madras Rubber Factory started by late Sir. K. M Mammon Maniple. Thecompany in April 1961. MR. was converted into public limited entered tree manufacturing in 1962 through a technical win R&D centre and currently functions independently. Strength &Weakness Analysis:- Strengths: 1. Good R&D imitative 2. Established brand name(key in the replacement market) 3. Extensive distribution network. Weakness: 1. High Capital Intensive 2. Cost pressure 3. Dealer Relations 4.

Pricing Pressure Market Strategy: * MR. has aggressively pursued a PULL Marketing Strategy to sell its tiers. In this strategy the manufacturer uses promotion,advertising and other forms of communication to induce the consumers and create a demand the product from the dealers. * MR. almost exclusively concentrates on Brand awareness exercises, such assessments and advertisements. * MR.,Compared to other tire manufacturer pays a little attention to incentives the dealers but still the dealer are motivated to stock MR. tiers simply because they have high brand retail recall and due to the customer demands.

Collaborations: MR. had collaborated with automobile MOM”s who source their tires from MR. India are:- * General Motors * Maidenhair and Maidenhair * Marti * Data Motors Value Proposition:- MR. prides itself in making tires that go into some of the most trying conditions on Indian roads. Consequently, MR. offers a compelling value proposition to heavy icicle owners as well as passenger car and two wheeler owners. Quality Tires that endure in the worst conditions. It drives home this macho message through its mascot, the MR. muscleman. MR. – Price Leader:- MR. have long been leaders in the passenger car tree segment.

By the virtue of their market share, they have traditionally been price makers. MR. using the Mark UP Pricing Method. The tree industry being a very raw material intensive industry, the input costs mainly decides the price of tires. Infect, 90% of a tires cost comprises of its raw material costs. Mark up pricing is the common pricing method followed across he tree industry. This involves adding a standard mark-up to the there’s production cost. Apollo Tires:- Apollo Tires Ltd. Is currently the world’s 15th biggest tree manufacturer and has annual consolidated revenues of RSI 121. 5 billion I. . US$ 2. 5 billion in year 2011. District of state Kraal. In 2006 the company carried out one of the biggest acquisition by acquiring Dunlop Tires International of South Africa. At present the company has four manufacturing units in India, two in Zanzibar, two in South Africa and 1 in Netherlands. It has a huge network of dealers and extensive distribution outwork of over 4,000 dealerships in India. Out of these 4000 dealers, over 2,500 are exclusive outlets. When looking into oversees business, in South Africa, it has over 900 dealerships, of which 190 dealers are accredited by Dunlop.

Its major revenue stream is India from where it gets 59% of its revenues, and then Europe which accounts for 28% of the revenue and 13% of its revenue comes from Africa. The tagging of Apollo tires is “Go the Distance” which he has followed for decades and their USPS is stronghold over the Indian tree market. Timeline: * 1976: Apollo Tires was registered by Uranus Sings 1977: Established its 1st plant at Vertebra, Kraal, India * 1991: Established the 2nd plant at Linda district of Gujarat. * 1994: Entered into 2 wheeler tree market * 1995: Established its 3rd plant at Jaywalkers district of Kernel. 2006: Expansion of operation in oversees market by acquiring Dunlop Africa operations. * 2008: Established a new plant at metropolitan city Achaean of state Tamil Undue, India * 2009: Acquired Predestinated, a Netherlands-based winter-tree maker for an undisclosed sum from Russian’s bankrupt largest tree manufacturer Matte- Predestine NV. * 2010: Apollo tires launched Graduates tires in India. 2011: Signed a Mom with Tamil Undue government relating to investment of RSI 2,100 core as part of Apollo Greenfield project. * 2012: News of Apollo Tires likely to acquire stake in Cooper Tire & Rubber Company. In passenger car segment the car Apollo tires share the no. L position with MR. tires with market share of 24% with Bridgetown at the third spot with market share of 19%. Products: Car Radials Tube Type (Amazed XSL Quantum) ex. Radials Hawk I Amazed XSL Storm I Alloy Wheels I Haste I Inspire I Torque I Slay I Nirvana I Multipurpose Frost I Sphere I I Cinch I Quest Tubeless Radials I Accelerate I Hawk I Amazed XSL I I Tubeless Radials Car I Jeep I Armor I Gripper I Panther I Mama Trooper SWAT ANALYSIS: Strengths:- 1 . Wide product variety 2. Excellent Geographical coverage across Asian, European and African markets. 3.

Good financial position 4. Good Brand awareness about the product 5. Over 4000 dealerships in India, and over 900 in South Africa 6. Has manufacturing plants at India, AS, Zanzibar and Netherlands Weakness:- 1. Low presence in latest car models. 2. Low presence in two/three wheeler segment 3. Brand yet to establish it like the market leaders Opportunity:- 1. Emerging markets and improved lifestyle . More tie-ups with Automobile companies as it’s mainly into BIB market. 3. Improved Infrastructure has fuelled more and more transportation 4. Emergence of India as a hub for small car production Threat:- 1. Price wars 2.

Stiff competition from national and international brands. 3. Cheaper technologies. 4. Volatility in prices and availability of raw material as Indian’s rubber production is less than its demand. 5. Government Policies w. r. T export duties, import duties, tax levied on automobile industries and economic condition of nation as it determines the sale of automobiles. Competition 1 . Bridgetown 2. SEAT 3. MR. 4. Continental 5. Goodyear 6. Yashmak 7. Peril BRIDGETOWN: Parent Company-Bridgetown Category-Tree Industry Tagging/ Slogan-Passion for excellence USPS- A renowned name for innovation and quality of product.

Bridgetown Corporation: Bridgetown the world’s leading tree company was born in 1931 with an aim to serve people by providing quality products. Bridgetown is a Japanese $ 80 billion company with a market share of 18. 6 % worldwide ; a profit of $ 797. 5 million. It has strength of 1. 1 lakes of employees serving at about 150 countries. Bridgetown is led y Mr. Chigoes and has 46 tree ; 52 non-tree plants for diversified products in 24 nations marketing their product in more than 150 nations.

Bridgetown is busy at developing ; promoting comprehensive product lines – from value oriented, medium priced tires to high performance tires for the world’s highest performance cars -Mediumistic, Honda, Suzuki, Toyota, Audit, Volkswagen, Handy and other famous brands of cars and other vehicles. Now, as the world’s no. 1 tree company, Bridgetown Corporation has made its presence felt on a global level. It has subsidiaries spread across the world – from America to Australia and from Africa to Europe. Adding to this, Bridgetown also provides value added services to its customers.

Collaborators: Toyota Handy Soda Mercedes BMW General Motors : International Quality ; pedigree: Quality counts as the main reason why Memos prefer Bridgetown over other competitor tree manufactures. Bridgetown has always banked on its quality USPS to capture market share. The Japanese attention to quality seems to have percolated down to Bridgetown India, from its parent company. World over, the Bridgetown brand has been synonymous with its cutting-edge technology and quality. The Fl

Association: The brand awareness that Bridgetown Corporation’s collaboration with Fl has earned globally and its recognition as a leader in the tree industry has helped its Indian arm, IBIS, position itself as a premium tree manufacturer in the Indian market. Channel reach: With about 3000 dealers and distributors, Bridgetown India has one of the largest reach across the country as compared to other tree manufacturers. SOOT ANALYSIS:- 1 . Bridgetown has its roots from The Firestone Tire and Rubber Company of US and Bridgetown Tire Company Limited of US. 2.

They have 52 enterprises of over 50,000 employees that testify to the fact that it’s a big brand name. 3. Company has diversified into other businesses including production of air springs, industrial fibers, approach towards building more sustainable and CEO-friendly products. 5. They have a strong brand name through Motor sports and car-racing. Weakness: 1 . Still to have considerable market share in developing countries 2. Products are perceived to be at a high-price segment- need to focus on developing economy products. Opportunity: 1 . Excellent opportunity in emerging economies of the world. 2.

Edge over better immunization regarding its environmental-friendly initiatives Threats: 1 . There is Stiff Competition from national and international brands. 2. Japanese ; US economies are not growing much . They have reached a maturity phase-as it has its major operations there. 3. Government Policies with respect to export/ import duties, tax levied on automobile industries and economic condition of nation since it determines the sale of automobiles. 4. Introduction of other transport facilities like metros, mono/local trains which keep pollution hazards caused by combustion of automobile fuels. 5.

Volatility of raw material price. . Fluctuation of exchange rates. Generic Strategies Analysis: Cost Leadership Goodyear needs to focus on maintaining a cost leadership strategy in order to attain their goal of “being the lowest cost producer of top three companies”. Goodyear maintains cost leadership because of its production volume and economies of scale. Cost Focus and Differentiation Focus Brimstone’s main competitors have, and will continue to develop sub-brands and acquire strategic business units in order to execute focus strategies on niche segments of the market, previously unreachable by them. Insofar Growth Matrix :-

Bridgetown I Existing Products I New Products I Existing Market I Market Penetration-Increase the promotional efforts of current tree lines in order to compete with Michelin ‘s strong brand image. Also use parent company (Bridgetown) to bolster the promotional efforts of the smaller subsidiaries as well. I Product Developmentally and push new retreated tires on the European market that is promoted to overcome the negative image of low quality I New Market I Market Development Indian and Chinese middle class and tree market is growing rapidly and there is an opportunity to capture that growth with premium tires.

I DiversificationDevelop a Bridgetown formula one clothing and accessories line to be sold in China. Value Proposition: Brimstone’s main value proposition is international quality and value for money. Every Bridgetown customer is assured of a tire that is of international standards and money. Porter’s Five Forces (Bridgetown): Marketing Strategies: Segmentation, Targeting ; Positioning (STEP): Segmentation: There are basic 2 segments in the passenger car segments 1.

Automobile and industry equipment manufacturers / original equipment manufacturer which constitute of 2. Replacement market which constitute of 30% f the total market of the passenger car tree market. Targeting:- Passenger cars, LLC, HCI, Subs, The target group of Indian car tree industry is both MOM and replacement groups thus all the player offer their product line in both the segment by targeting passenger cars, LLC, HCI, Subs Positioning:- When it comes to positioning market players position themselves very differently in the above 2 segments.

For the MOM segments the positioning is not of much use since the basic game is on margins and on the past relationship which matters thus we can say that the market players positions themselves on past relationship with he MOM in this segments The real positioning takes place in the replacement segments which constitute 30% of the total market share. Here the position taken by different players is based on luxury, style, utility and safety.

Product, Price, Place ; Promotion: (4 AS): Product: The tires companies all offer very similar products with very minor changes in them where the end consumer is not able to differentiate tem to a large extent. They are generally measured in terms of durability, endurance and Safety. Price: There are many players in this market with a very low product differentiation; once price plays a vital role in this category. The prices of these products are very similar to each other and often the channel members play on low margins and large volumes to be successful in the market.

Place: The distribution channel includes: * Factory * Divisional ; Regional distribution center * Carrying and Forward Agents * Dealers Though the channel members require huge working capital in this industry. The return provided by the channel is high rewarding and hence making it a lucrative industry with many plays wanting to enter the channel. Sell their products. The expenditure on promotion is the responsibility of the company as the dealers and distributors work on a very low margin and cannot afford to promote the product.

Interview with Professor Parka’s Mature Dry. Mature is an Engineering Graduate both in Electrical and Mechanical Engineering and a Post Graduate in Advanced Manufacturing Technology from University of Melbourne, Australia. Dry. Mature has three decades of work experience of which approximately two decades was in the Fortune 100 companies at senior echelons in USA, Australia and India. He was working with Ford Motors India as the Supply Chains Head. On requesting him to give his insights about the tree industry he immediately agreed to help us. Dry.

Mature who also happens to be a fulfillment professor at Great Lakes Institute Of Management gave us a very informative interview and we learnt a lot through our brief talk with him. The following are some of the key learning from the interview. Dry. Mature initially spoke about the Indian Tree industry that it faces huge competition, cost and price pressure. The zooming auto industry has driven the growth and number of vehicles is swelling. The truck and bus market is the largest in terms of value. The tree is an assembly of many components that are built up on drum and then cured in a press under heat and pressure.

While the tree industry is largely dominated by the organized sector, the unrecognized sector is predominant with respect to bicycle tires. The industry is a major consumer of the domestic rubber market. Natural rubber constitutes 80% while synthetic rubber constitutes only 20% of the material content in Indian tires. Interestingly, world-wide, the proportion of natural to synthetic rubber in tires is 30:70 The sector is raw-material intensive, with raw material accounting for 70% of he total costs of production.

The major factors affecting the demand for tires include the level of industrial activity, availability and cost of credit, transportation volumes and network of roads, execution of vehicle loading rules, retaliation, retreating and exports. The tree manufacturing process involves a long term planning. Most of the manufacturers give yearly schedule to the suppliers and the manufacturers manufacture according to that schedule. They do not cater only to a particular company say Ford.

A tree manufacturer like Goodyear will supply tires to Toyota, Chrysler, Ford and many other companies. They schedule at their level-a schedule of 3 days or 1 month or 1 week inventory each company is taking and accordingly schedule it. This is as far as the tree manufacturer’s scheduling is concerned. Once it is ready they directly supply to the car manufacturers. The tree manufacturing company does not only manufacture car tires, they also manufacture for trucks and other commercial vehicles.

Volume is low as compared to car but the value is high. Every truck requires 7 wheel tires. So there are vehicles which require more tires than cars, hence value wise it is much higher than the cars. Companies eke Goodyear India also manufacture tires for passenger/military airplane are directly supplied to the plane manufacturers. So hence there is no supply chain or distribution channel as such. The distributors and dealers come into place at the replacement market (over 50% markets) All the sales and distribution also happens here.

Otherwise it is directly to the plane or car manufacturers. Marketing a tree is a very crucial aspect to look at. What do you look at, as a car manufacturer while buying a tree? How to valuate which company to go for? It depends on the specification and the design of the car, terrain f the road, mileage and speed of the car and hence the desired tree appropriate for it. Let also depends on what is the life of tree that you expect. The composition of the tree I. E the rubber quality etc also plays a major role here in choosing a tree for a car company.

The grip of the tree is very important while selecting a tree. As the tree film which does not have any contact with the road I. E. No friction; plays a critical role when a car decides to stop and how quickly the tree comes to halt is observed. Since tree is a commodity and cannot be much differentiated, the car companies stick to heir loyal tree manufacturers as they have a long term relationship with them. And because of this relationship, the tree manufacturing company sells tires at a very low profit margin.

Although KIT exists, you find that all car manufacturers will have a maximum of 2 tree suppliers unless it is a highly dedicated monopoly product. This is because in a situation where one of the suppliers is going under strike and the other supplier senses the car manufacturer’s dyer need for supply they will refuse to negotiate. Most of these tree suppliers know all information of what is happening internally in their competitor company. In India as well as in America you will find only few car manufacturers having their own car tires.

The tires are also tested for their quality as we have to give some sort of an assurance to the car manufacturers about the good life of the tree and a warrantee that the tree won’t get worn off before the promised period. The cost of tree faults such as puncture or tree burn is not borne by the car company. Just like for buying laptop, you don’t guarantee of the battery life. The real sales and distribution happens in the secondary market that is placement market. What is the channel structure? There will be 2 distributors-primary and secondary distributor and a 3rd main dealer.

The destination of this chain is towards the rural areas. Why was nylon tires introduced in the market? It is partly because of technology change. They are radial tires with more grip as a subsequent to tubeless tires. Another significant aspect is that rubber tires are retread but nylon tires are not retread able. You can add more material and retread the design part. Therefore you not only have more choice but you can also repair the tires. Retreating has now completely stopped and more focused in the replacement market.

That’s why you find more rubber tires though manufacturing cost is more here. Primary and secondary distributors are usually company owned. The number of distributors depends on the financial position and capacity of the company. The company distributors distribute through only 1 company tires but the other big distributors might cater to several brands. Secondary distributors usually in the remote areas distribute to many manufacturers and dealers definitely supply to many companies as they are not obliged to any particular company unlike