Lont041 Enterprise And Innovation- Competitive Assessment Answers
📄 1 Pages / 111 Words
You are expected to undertake a market feasibility analysis for a proposed business idea. This is to be written up as a business plan feasibility report. The written report along with the presentation will assess understanding of relevant concepts and ability to apply what they have learned about constructing a feasible business plan.
The following criteria will be assessed in the feasibility analysis:
Industry overview: understanding of structure, stage of life cycle and implications.
Analysis of Industry environment: e.g. using Porter's 5 Forces.
Customer-orientated evaluation: evidence of data collection (primary and secondary), stakeholder evaluation and customer segmentation/profiling.
Competitive intelligence: identification of key competitors, evaluation of performance characteristics.
Answer
Introduction/ Industry Overview
The product under consideration is travel cooler. The demand of this product is particularly high for travellers who like to travel outdoor. In general, the travel industry is a booming industry with an annual growth rate of 8% to 10%. The travel industry in Australia and other developed nations is increasing at a good growth rate. The increase in the disposable income of consumers in the developing countries like India has further given a push to travel industry. An important aspect of travel industry is outdoor travel this product, ‘outdoor cooler’ is an innovative product that would solve the problem of outdoor travellers. The industry can be considered in its emerging stage (Casadesus?Masanell & Zhu, 2013). The industry is far away from maturity as it is expected that the industry would continue to grow at a CAGR (Compounded Annual Growth Rate) of 8% to 10%. The industry is in a stage where multiple stakeholder and competitors can co-exist. The deeper look at the industry using Porter Five forces model can be discussed as:
Porter Five forces analysis
The ‘porter five forces’ is a powerful tool to assess the industry. It would be correct to say that it is the combination of these forces that decides the overall attraction of any industry. Each of the forces of Porter five forces model for outdoor travel industry can be discussed as below:
Bargaining power of suppliers:
The bargaining power of suppliers can be considered as low or moderate in this industry. There are number of suppliers in the market and the organizations that wish to develop the innovative product like outdoor-cooler have the options to select from various suppliers (Spieth & Schneckenberg, 2016).
Bargaining power of buyers:
The good thing about this industry is that the bargaining power of buyers is also low. The industry is not yet matured and the penetration of innovative products like outdoor cooler is less in the industry. This put organizations in a good position to use the premium pricing.
Threat of substitutes:
The threat of substitutes is high in this industry. The product, ‘outdoor cooler’ is not a necessity product that has to be used by the traveller. The product has an elastic demand and consumers would not mind to switch to some other product. The low cost of customer switching also make the threat of substitute high (Martins & Rindova, 2015).
Threat of new entrants:
The threat of new entrants is also high in this industry. The product imitation is also high in this industry. There are not much entry barriers in the industry and large players in the market can easily enter the market. The low entry load and low exit load also make the threat of entrants high in this industry.
Existing industry rivalry:
The existing industry rivalry is moderate to high in this industry. In the current scenario, there are not much of the players that compete in the industry. However, there is always a threat that industry rivalry can increase with the entry of new players in the industry. The threat can be more if there is an entry of large players. For this innovative product, the industry is in nascent stage and the existing industry rivalry may not be one of the best indicators for upcoming industry rivalry in future.
Customer oriented evaluation
It is expected that this product innovation would be a huge success in the market. The consumer mind set is already positive. For this product, ‘outdoor cooler’, there is no dearth of interactive content that can be developed to support service operations and increasing customer satisfaction. There are many forms of interactive content that can be developed by the organization for supporting service operations and customer satisfaction. For example, the cooler has a USB port for charging and a knife and chopping board. It can be said that the consumers’ perception of risks with this product is minimal. Perceived risk refers to the uncertainty in the mind of the customer while buying the product. Perceived risks can be about the functionality or usability of the offering, doubts about the hidden costs of product, social risks, financial risk, after sales services risk about the product. This risks often arises in the minds of the customers when they are not able to find the complete information and also when the brokers and people involved in selling the products are not able to handle/answer/convince effectively to the customers (Saebi & Foss, 2015).
Competitive intelligence
It is very important for the organizations and the startups to have a deep understanding of the competitive landscape before they take any expansion decision. The outdoor travel market is highly fragmented with number of organized and unorganized players. The large and the established players are the part of un-fragmented or the organized market and the small players are the part of fragmented or un-organized market (Kastalli & Van Looy, 2013). Today, organizations have expanded in different parts of the world and they fight together to get customer share of mind and customer share of wallet. The product is a new product in relatively developing industry. The research suggests that much of the information is not available around competitive intelligence.
The large FMCG (Fast Moving Consumer Goods) companies can anytime enter the market and disrupt the existing market dynamics. Therefore, it is important that the existing players in the market should be considerate about the big players in the industry that can disrupt the market. The competitive intelligence can be achieved with the focus on market orientation. It is important and critical that organizations should keep a watch on other players in the industry.
Conclusion
The above paper discusses the business model innovation of ‘outdoor’ cooler. With the above discussion, it can be said that there is a lot of potential in this business idea. The learning from Porter Five forces model would help the organization to launch the product in an efficient manner in the market. At the same time, patent could be a good measure to save the product from imitation.
References
Casadesus?Masanell, R. and Zhu, F., 2013. Business model innovation and competitive imitation: The case of sponsor?based business models. Strategic management journal, 34(4), pp.464-482.
Kastalli, I.V. and Van Looy, B., 2013. Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance. Journal of Operations Management, 31(4), pp.169-180.
Martins, L.L., Rindova, V.P. and Greenbaum, B.E., 2015. Unlocking the hidden value of concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship Journal, 9(1), pp.99-117.
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), pp.201-213.
Spieth, P., Schneckenberg, D. and Matzler, K., 2016. Exploring the linkage between business model (&) innovation and the strategy of the firm. R&D Management, 46(3), pp.403-413.
