The document discusses the key features and drivers of change in the home appliances industry. The 11 key features discussed are market growth and size, competitive rivalry, number of rivals, learning curves, economies of scale, pace of technological change, product innovation, production capacity, buyer needs, product differentiation, and vertical integration. The 5 key drivers of change discussed are product innovation, technological changes, changes in costs and efficiency, regulatory/policy changes, and globalization.

1. Q: What are the industry’s dominant features?
INDUSTRY’S DOMINANT FEATURES:
1. Market growth rate and size
The market growth rate was very high at its early maturity but now it is on it
maturity stage so the growth is steady but the size of market is much expanded
due to global competition.
2. Scope of competitive rivalry
There is big scope of competitive rivalry because the big companies in this
industry has already doing business globally its mean they are already mature at
their parent country so the competitions in this country will increase.
3. Number of rivals
There is several numbers of rivals in this industry because there are lot of global
regional and local companies is in this industry.
4. Learning and experience curve
The existing companies was available in the market from-1980’s so they are
more experienced and skills as compare to new rivals. They improving their R &
D and cost efficient through learning and experience curve.
5. Economies of scale
All of the major home appliances manufactures were heavily engaged in
renovating and building production facilities improve quality and reduced Labor
and material cost to gain Economies of scale.
6. Pace of technological change
Pace of technological change was very high companies were competing through
technology they introduce SMART products.
7. Product innovation
U.S appliances manufactures were moving towards a stronger product-oriented
market. They designed there product for customer satisfaction and as per the
need of customer. They introduce energy saving appliances. Whirlpool, GE,
Maytag and other company design their product as energy saving and efficient
and uniquely differentiated. A survey of 500 residential found that roughly 25% of
the population said that they would be willing to pay 15% to 25% above the
standard price for higher energy saving appliance.
8. Production Capacity
Production capacity not effecting the prices and the profits because as they
increased to produced energy saving products and cost efficient products,
customers more attracts towards these attributes.
9. Buyers needs and Requirements
US buyer’s needs sophisticated machinery which they can present in their small
threats, they also need full kitchen solution which is filled by the Global
companies.
10. Degree of Product Differentiation.
As this Companies Focus on Differentiation, Then there technology became
same and they lost their differentiation and the price competition increases.
11. Vertical Integration

2. AB Electrolux, Siemens, Whirlpool, form the B2B electronic market place for
European Households Appliance maker, Distributor and retailers for the
convenience of Dealers.
Q: what are the drivers of change? Please justify them.
Drivers of Change:
1. Product Innovation
Justification:
In 2002 U.S appliances manufactures were moving towards a stronger product-oriented
market. They designed there product for customer satisfaction and as per the need of
customer. They introduce energy saving appliances. Whirlpool, GE, Maytag and other
company design their product as energy saving and efficient and uniquely differentiated.
A survey of 500 residential found that roughly 25% of the population said that they would
be willing to pay 15% to 25% above the standard price for higher energy saving
appliance.
2. Technological change and manufacturing process
innovation
Justification:
In 2002 manufacturer were introducing “SMART” appliances with increasingly
sophisticated electronic controls and self diagnostic features. ”Smart Appliances” were
being connected to the internet. These appliances could call for service, download
programs, contact security providers in case of gas leaks or fire, pay utility bills, and be
programmed remotely to start and stop when needed.
3. Changes in cost and efficiency
Justification:
The basis for effective competition had been producing the fewer basic components
necessary in the most efficient plants. Although individual designs might vary, the
components inside the appliances were becoming more universal and were being
produced highly automated plants, using computer-integrated manufacturing process.
Fewer parts mean simple manufacturing and less chance of break down. The result was
lower manufacturing cost and higher product quality.
4. Regulatory influences and government policy changes
Justification:
With the dawn of 21st
centaury, major home appliance manufacturers faced a
new set of certification standards beyond the ISO 9000 series. It dealt with
quality management system, ISO 14001 covered environmental management
systems (EMS). Some international markets like European Union could require
certification as a prerequisite for doing business.

3. 5. Globalization
Justification:
The industry diversifies globally in 2002, the Korean and Japanese company
were come in the industry they were broadly diversified and well established
globally and U.S markets become globalize.
Q: industry competitive analysis of porter model?
Threat of New Entrants/ Entry Barriers
Factor HUFA MUFA Neutra
l
MFA HFA Comments
Economies of
scale
Small 5 Large It’s difficult to any domestic
company to compete with
these global companies
because they capture 90% of
the market share and
increase competition through
cost efficiency.
Capital require
red
Low 4 High Capital required is increase
so its difficult to any new
entrants to enter with a large
capital in competition with
these global companies
Access to
distribution
channels
Ample 4 Restricted It’s difficult for any new
entrant to grab distribution
channels because the market
leaders have very strong
impact on distributions
channels.
Expected
retaliation
Low 1 High Former companies retaliate
through diversification and
globalization so its difficult for
new entrant to compete with
these global players.
Differentiation Low 5 High It’s difficult for any new
entrant to adopt technology
pace and create
differentiation in this highly
competitive industry.
Brand loyalty Low 5 High All global companies have
very good brand positioning
in customers mind so its
difficult for new entrants to
create brand loyalty.
Experience curve Insignificant 5 Significant Any new entrant could not
get experience curve he has
to spend sometime in
industry.
Govt. action Low 4 High Govt. launches new

4. certification in industry to
regulate manufacturing and
environment.
Total avg score 4 Entry barriers are strong that
mean industry is attractive.
Exit Barriers
Factors HUA MUA Neutra
l
MA HA Comments
Specialized
assets
High 5 Low There are no such specialized assets in
this industry so it is easy to exit from the
industry so it is easy to exit.
Fixed cost of
exit
High 4 Low There is no such fixed cost associated to
exit from the industry so new entrant can
easily exit.
Strategic
interrelationship
High 1 Low They have strong strategic
interrelationship with suppliers and
distributor so it’s difficult to exit.
Govt. barriers High 5 Low There are no govt. barriers so it’s not
difficult for any company to get out of its
business.
Total avg score 3.5 There is no such high cost related to exit
so the exit barriers are too low industry is
attractive.
Competitive Rivalry
Factors HUFA MUFA Neutra
l
MFA HFA Comments
Composition of
competitors
Equal size 1 Unequal
size
The compositions of competitors
are equal in size because the
main rivals are belonging to global
market.
Mkt, growth
rate
Slow 3 High Growth rate is stable because the
industry is in maturity.
Scope of
competition
Global 1 Domestic It is global because the industry is
competing with diversification
strategy.
Fixed storage
cost
High 3 Low Its neutral because these type of
products don’t have expiry dates
but they have a threat of getting
old in terms of technology, model,
design and other features.
Capacity
increase
Large 3 Small We rate it neutral because in US
home appliance industry
competition is very high due to
technology & product Innovation
but at the same time they do

5. more work on Quality And
renovation to control Labor and
Material cost.
Degree of
differentiation
Commodit
y
5 Specialized It is high because the companies
are competing in the industry with
differentiation and all the company
has their own degree of
differentiations.
Strategic stake High 5 Low It has low rating because this is
not a bread or butter for these
companies because these
companies are already well
established globally.
Total avg
score
3 Rivalry among the competitor is
neutral so industry is mildly
attractive.
Power of Supplier
Factors HUFA MUFA N MFA HFA Comments
# of
important
Suppliers
Few 1 More They have very few suppliers that is why
the application of new technology and
product process is totally one way from
the companies.
Switching
cost
High 1 Low Switching cost is high because there is
no more buyers and the companies make
alliances with there suppliers.
Availability
of
substitutes
Low 1 High There is no such substitute of home
appliances.
Threat of
forward
integration
High 5 Low There is less fair of forward integration
because the major raw material is steel
and its not commonly produce material.
Importance
of Buyer
industry to
supplier’s
profit
Small 3 Large We take it as neutral because the
presence of powerful buyers reduce the
profit of the industry overall.
Quantity
purchased
by the
industry of
supplier’s
product
Low 4 High It is high because there are no such
suppliers so the whole industry should
rely on these few suppliers.
Suppliers
product an
important
Highly
Important
1 Less
Important
The supplier’s product is highly important
in the manufacturing of the product and it
designing also.

6. input to the
buyer’s
business
Total avg
score
2 The suppliers are unfavorable for the
industry that mean power of supplier is
high.
Power of Buyer
Factors HUFA MUFA N MFA HFA Comments
Number of
Important
buyers
Few 3 Many We take it as neutral because there
is no such buyers in the industry
there are few important buyers in
the industry.
Threat of
Backward
integration
High 3 Low It neutral because the major
distribution channels of US home
appliances are two contractual &
retail. But most famous is
contractual.
Product
supplied
Commodity 5 Specialty The product supplied is Special.
Switching cost High 4 Low It is rated 4 because after the
independent retail stores most of
the companies switch over to it.
% of buyer’s
cost
High 2 Low It is high because the market is very
competitive in terms of distribution
channels.
Profit earned
by buyer
Low 4 High The sales were increasing through
the channels of distribution diverse
so the profitability is also increased.
Importance to
final quality of
buyers
purchase.
High 1 low It is very high because the
competition is very high so the
quality of final product is also
getting high and costumer
expectation is also high.
Total avg
score
3.14 Buyer power is neutral so industry
has good position
Threat of Substitute Product
Factors HUFA MUFA N MFA HFA Comment
Threat of
Obsolescence
of Industry’s
product
Hi 5 Low No thereat, There is no substitute
product.
Aggressiveness
of substitute
Hi 5 Low No Aggressive Marketing because
there is no substitute product available.

7. products in
promotion
Switching Cost Low 1 Hi No switching cost because there is no
other product.
Perceived
price/ value
Hi 5 Low Perceived price is lower then hiring
servants
Total avg score 4 Due to weak substitute in the market
the industry is favorable.
Overall Industry attractiveness
Factors Unfavorable Neutral Favorable
Entry Barriers 4
Exit Barriers 3.5
Rivalry among
existing firms
3
Power of buyers 2
Power of suppliers 3.14
Threat of
substitute
4
Total score 3.27
Q: Identify Key Success Factors for the industry and develop Competitive profile
matrix
Strategic
Factor
Weight Company
Whirlpool
Rating
Company
Whirlpool
Weighted
Score
Company
GE rating
Company
GE
Weighted
Score
Technological
Related
0.4 4 1.6 4 1.6
Manufacturing
Related
0.2 3 0.6 3 0.6
Distribution
Related
0.2 3 0.6 3 0.6
Product
Innovation
0.1 4 0.4 3 0.3
Marketing
Related
0.1 3 0.3 2 0.2
Total 1.00 3.5 3.3

8. Q: Plot Strategic groups within the industry.
Local
Wide Product Line
Global
Regional
Whirlpool, Ab
Electronics,
Haier,
Maytag
Matsushita,Sharp
Toshiba, Hitachi,
Candi & Merloni,
Miele, Samsung
&Daewoo
General Electric,
LG, Siemens
Subzero, Guangdong,
Maybe, Arclik,
Multibras,Fisher &
Paykel,