Competitive environment and strength of a company, Business Management

Competitive Environment and Strength of a Company

Over the years the growth in Glass industry had slowed down and margins are shrinking in high volume markets. The reason attributable to it is the logic that initially demand was huge and growth for market was tremendous on account of rapid infrastructure development that was taking place fuelled by rapid industrialization. The first mover advantage always existed and the one like XYZ Glass who entered market at that time were able to capture huge markets and earned good money but as more and more competitors joined in processes improved, production cost lowered and it lead to price competition leading to shrinking margins for high volume demand product and those companies who were vertically integrated or had lower cost of operations survived while other started bleeding. The other story was of business focussed on making available products that were customized to demands and require less efficient product cycle and high quality output. Because of its typical issues involved it offered very lucrative margin but volume was not very attractive for big players to foray into it as it reqd. Completely different operation and mgmt. Style.

To talk about company's strength it would clearly be one in the second type of markets - speciality products. Since its inception in 80's company has always focussed itself into speciality products segment by offering converted pieces from large sheet which at that time was integral part of this segment. Over time as segment got redefined and many competitors with better and faster production technique having vertical integration entered they shrunk margins making it no so attractive for companies like this. This speaks that company's strength is to offer products that have to be customized and produced and require precision and quality control and an increased amount of individual effort. They are not the one who is into volume games.

 

Posted Date: 3/2/2013 1:31:20 AM | Location : United States







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