Chinese Firework Industry

Topics: Marketing, Fireworks, Consumer fireworks Pages: 4 (1782 words) Published: April 8, 2013
3. In the Chinese firework industry porters five forces weigh in extremely heavy, now there may not be a perfect way to control the industry and insure you are the top contender, but there are strategic alternatives that could help Jerry Yu and his future investment. The alternatives that could help would have to give jerry a competitive advantage which would overcome one or multiple external forces.   Jerry Yu runs a chain of family owned gift shops in the U.S.; he could very well utilize this clear advantage by importing fireworks from the factory to his chain of stores. This would give the factory a steady flow of decreased buyer power and possibly help solidify a steady cash flow. Due to a promising flow of sales for the factory this would mean that the factory would have to buy more supplies, with a larger consumption of products the supplier would then be able to sell to the factory for lower prices. This would lower the risk of supplier power and possibly beat out competitive rivalries. As the consumption costs lower, this leaves room for a greater profit margin, which in the end is what Jerry is looking for. This alternative would be a very self-motivated way of overcoming the forces, this could fall through if Jerry is not successful in selling the fireworks through his store or not advertising enough.   A second alternative to the threats of these forces would be price matching regulations. The intervention of governments to monitor the sales of certain kinds and different amounts and grades of explosives would benefit Jerry and his investment tremendously in the case of buyer power. This would mean that if a retailer would like purchase a certain grade or type of firework there would be a minimum price they would have to pay, this would protect Jerry’s factory by preventing copycat products and letting the retailer choose on quality and safer products. Therefore Jerry’s factory would be protected from buyer power and new entry. In this case...
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