2.1.5Key Drivers for Change from PEST Analysis3
2.2Porters Five Forces Analysis3
2.2.2Threat of Entry (Medium to low)3
2.2.3Buyer Power (Low)4
2.2.4Supplier Power (Low)4
2.2.5Threat of Substitutes (Low)4
2.2.6Competitive Rivalry (Medium to High)4
2.2.7Conclusions from Five Forces Analysis5
2.3Strategic Group Analysis5
2.3.2Barrier to Mobility5
3.2Value Chain Analysis6
3.3Resource and Competencies7
Appendix 1External Analysis
Appendix 2Porter’s Five Forces Analysis and Diagram
Appendix 3Strategic Group Analysis and Diagram
Appendix 4Resource Audit
Appendix 5Value Chain Links and Value Chain Diagram
Appendix 6Resources and Competencies
This report looks at the Changes that have taken place in Viking Sewing Machines AB in the past few years and assesses if these have been a rational response to changes in the External Environment.
(See Appendix 1)
1 P.E.S.T. Analysis
Companies trading in a global market have to be aware of the politics of each country they trade in. Government stability is important as it could become an expensive error to invest in a country that then seizes operations of foreign companies. Taxation, Tariffs and Quotas all need to be appraised before trading with a new country, as does the local laws regarding machine mechanical or electrical safety.
Companies have to be aware of changing economic conditions and economic cycles. Currency fluctuation is an on going problem despite countries working to reduce wild fluctuations. An issue for the sewing machine industry is the lack of market information. Unlike other industries there is no official body collating sales information that can be used in strategic analysis. A voluntary scheme was set up but with in limited geographic areas and this only gave rudimentary information.
The falling western market economy can be bad for companies unless they can tap into the change in age demographic which is happening at the same time. If industries can provide products that would be appreciated, wanted or needed by an elderly population then they will be successful. Sewing machine manufacturers could easily target this demographic but this may involve education of the Demographic so that they accept the ideas being proposed.
Technological advances have been huge in the past 20 years with computers being involved in every aspect of western life. Companies that do not take advantage of such technology will be left behind if their competitors do so. The Internet is one area that businesses and organisations can not afford to ignore. Huge new markets have developed through the internet in what is called E-Commerce and now small companies can trade in any country in the world. Sewing machines have become computerised machines that sew and western buyers appreciate that type of technology.
5 Key Drivers for Change from PEST Analysis
Key drivers for change in the Sewing Machine Industry would be:
• Economic – There is a need to apply a strategy that would see a business through another slump in the economy.
• Culture – Sewing, in the west, is no longer as popular as it was and as a result sales are declining. Companies need to either find a marketing strategy to cope with this or consolidate their operations in the...