Case Study

Topics: Porter generic strategies, Marketing, Michael Porter Pages: 6 (1648 words) Published: June 23, 2010
Assignment 2

Q1: Analyze the environment in which tele-shopping was attempted.

Ans1: First let us know what is teleshopping - "The basic concept of telemarketing is that you should be offering what is not available in the retail market. With the growing popularity of satellite and cable television in the late 1990s, changes in lifestyle and a general improvement in the standard of living, teleshopping picked up momentum. By 2001, the total teleshopping network business in the world amounted to over $ 5. By 2000, the teleshopping market in the US was valued at around $2 billion. This becomes a lifestyle moment as it starts to gain its popularity from west towards east.

Thus the environment aspect and way used by companies to grow this business is mentioned below in detail but in country like India, where the development is just started at that period and purchase power start increasing, this is not an easy business module as it restricted to elite segment linked highly with lifestyle but late with price and promotion correction, it got place in market. Now detail analysis of environment: During the early 1990s, Indian laws prohibited customers to import products, without acquiring prior permission from the regulating authorities. These laws also restricted the repatriation of money (out of India), without the prior permission of the country's central bank, the Reserve Bank of India (RBI). This was a major reason for the evolution of teleshopping in India, unlike the US, where teleshopping evolved due to the changing societal norms. During the mid-1990s, Telebrands India, a 100% subsidiary of Telebrands Corp., pioneered the concept of teleshopping in India and soon grew into a leading teleshopping network in the country. In mid-1995, TSN (another major US-based teleshopping network) and Asian Sky Shop (ASK), owned by the media giant - Zee also entered the market. The other major players in the Indian teleshopping market were TVC, TSNM and Star Warnaco.

All these networks adopted the following way to gain popularity to gain advantage in Indian environment: • Buying time slots on popular channels that had high penetration and enjoyed good viewership among the target customers. • Providing a special product code for every product and displaying it along with its price. • Setting up call centers in various cities, on the basis of the scale of operations and the extent of penetration expected. • Providing viewers with telephone numbers of these call centers and asking them to call their nearest call centre for further enquiries or to order the product. However, the Indian teleshopping network grew at a very slow pace, on account of factors such as 1) the lack of education and awareness among people,

2) low standard of living,
3) low rate of women employment,
4) And low penetration of TVs/telephones.
Moreover, unlike the Western countries, shopping for an average Indian had traditionally been an occasion for 'social outing' and enjoyment.

Q2: What were the strategies adopted to take on Michael Porter’s 5 force model?

Ans2: The five forces which one must consider to analyze any industry are the rivalry between the firms within the industry being analyzed, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products or services, and the threat of new entrants (also known as barriers to entry). Each of these five forces is analyzed in further detail in their respective links above. The Five Forces framework has been accepted as a strategic framework which one can apply to analyze any industry. To deepen the analysis, a three by three buyer-supplier matrix has also been provided which depicts the interplays between buyers and suppliers, two of the Porter five forces.

The major analysis from this porter principle is:
* The Analysis provides a framework to analyze the forces that reduce the profits of an industry. * The Analysis focuses on whether...
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