Assignment 1: Structural Analysis of an Industry (CSD)

Group Members
B19005 Ambar Laad
B19012 Chinmay Mundhra
B19016 Divya Mani Tripathi
B19045 Utsav Shah
B19051 Sneha Bahety
B19058 Veni Gupta
 Attractiveness

Low High

1 2 3 4 5

No. of Large Grocery

competitors store

Vinyl
Industry growth Slow
record

Fixed cost High Steel

Differentiation Low Sugar

Switching cost Low Diskette

Openness of Secret Used car

terms of sales

Excess capacity Large Residential

property in

Bangalore

Strategic stakes High Internet

browser
 Remarks

Wide
Small
bodied There are few but bigger players in the bottling industry and
jetliner
hence the actions of any player cannot go unnoticed

Internet The industry is growing quickly and will continue doing so.
Fast
browser Hence, the players will not compete to take each other's
market share
Real estate
Low The fixed cost are high which makes the players push for
agency
maximum capacity utlilization
Beer High The products are differentiated and hence it is difficult for
competing firms to poach customers
Software High Since the infrastructure is already set up, switching costs are
less within the industry
Stocks Open
Since there are very few players in the industry and even the
suppliers are rivals, there is no openness

Office
Small
space in
South Since, the sale depends on demand and supply and the
Mumbai products are similar in nature, firms may lead to price war due
to over production and excess capacity

Part-time
Low
coaching The strategies of the firms are diverse and this leads them to
run head-on in terms of strategy
 Attractiveness

Low

1 2 3 4

Asset High Steel

specialization

Cost of exit High Steel

Government High Public bus

service in
restrictions
UK
 Remark

High

Automotiv
Small
e The investment in assets are high and they are highly specialized
gears in nature which makes them difficult to dispose off.

Tea stall Small

Cost of exit is high because it is a very niche business

Grocery Small
store Highly regulated industry due to it's usage of water
 Attractiveness

Low

1 2 3 4

Economies of scale Small Tea stall

Product Low Sugar

differentiation

Brand identity Low Sugar

Switching cost Low Diskette

Access to channels Easy Newspaper

of distribution

Capital requirement Small Tea stall

Access to Easy Generic

technology drugs

Access to raw Easy Distilled

material water

Government None Tea stall

protection
High

Oil refinery Large

Beer High

Cigarette High

Software High

Petrol Limited

Oil refinery Large

AIDS Restricted
medicine

Ivory Restricted

Public bus Substantial

in UK
Remark

The production is in mass and hence it is very difficult for the new player to achieve
similar economies of scale

Products are differentiated and there is a huge advertisement and customer service

Since there are vey few players in the industry, brand identity is not that important for a
bottler but it is very important for the concentrate producer
Since, heavy investments are required in this industry, the cost of switching for a new
entrant is usually high

The new entrant can easily set up the distribution channel and get into the business

The capital requirement is very high for the new entrant to set up the business. Also, lot
more fund is required for R and D purposes

Access to the technology is neither too high nor too low as they produce the final product
in consultation with the concentrate producer

Access to raw materials is easy as far as water and suagr is concerned but they have to
strike a deal with the concentrate producer to be their bottler as it is the most important
raw material

Highly regulated industry which can be a major factor in barrier to entry

 Attractiveness

Low

1 2 3 4

Fountain
Availability of High
pen
close substitutes

Switching cost Low Diskette

Vinyl
Substitute’s Better
record
price-value

Vinyl
Profitability of High
record

the producers of
substitutes
 Remark

High

AIDS Low As far as substitutes are concerned, there are very few in
the Coco Cola bottling industry. Some of them can be the
medicine soda machines

Customize
High The switching cost for the substitutes is low because they
d
already have similar infrastructure set up which might
Software need very little modification

Suburban Worse
Since, the bottlers operate on the high economies of scale,
trains in substitutes price value will be usually higher than that of
Mumbai the existing players

Trans- Low
Profitability of the substitues may be low or high
Atlantic
depending upon the type of substitute and the scale at
flight
which they are operating
 Attractiveness

Low

1 2 3 4

Air bags
Number of Small
for
buyers cars

Fountain
Availability of Many
pen
substitutes

Switching cost Low Diskette

Air bags
Buyer’s threat of High
for
backward cars
integration

Air bags
Industry’s threat Low
for
of forward cars
integration

Contribution to Low Low end

quality packaging

Contribution to High Housing

cost

Buyer’s Low Public bus

profitability service
 Remark

High

Toothpaste Large
There are large number of buyers and hence the bottlers have more
bargaining power

AIDS Few
There are few substitutes and hence the bargaining power depends
medicine on the bottlers

Software High
The buyers can switch between different brands without much cost

Cars Low
The buyers can not enter the bottlers industry as it requires a huge
capital and it is very different from the business they are already in

Oil refinery High

The bottlers can not start retailing the product and hence it is low

Semi- High
conductor The buyers expect a good quality and are not much price sensitive
chips as quality matters first

Paper clips Low

There is no contribution of cost from the buyers and hence they do
not have much bargaining power

Luxury
High
cars The profitability of buyer is low as compared to that of the bottlers
due to both price and quantity
 Attractiveness

Low

1 2 3 4

Number of Small PC
suppliers

Availability of Few PC
substitutes

Switching cost High PC

Supplier’s High PC
threat of
forward
integration

Petrol
Industry’s Low
pumps
threat of
backward
integration

Contribution High PC
to quality

Talcum
Low
Contribution powder

to cost

Vinyl
Industry’s Low
record
importance to
supplier
 Remark

High

Tea stall Large

The concentrate suppliers are very less in the industry mainly Pepsi and Coca Cola

Tea stall Many

Substitues of concentrate are very less, while that of other ingredients are high in
number

Garment Low
Switching cost for the bottlers is not too high because of the set up infrastructure

Wide Low
bodied
The concentrate suppliers can start the bottling business as they have capital as
jetliner
well as technology. Infact, many of them have already started doing so.

Garment High

retailers
It is impossible to backward integrate as the formula is a secret.

Low end Low

The supplier provides the main ingredient that differentiates the product and hence
packaging
the contribution is high

High
Oil refining
Pepsi and Coca Cola have made investments in their bottling partners thereby
contributing both in cost as well as technology

Cars High
Bottlers are important to the suppliers as there are very few of them available and
they play a very important role in the final product
 Attractiveness

Low

1 2 3 4

Industry protection Low Tea stall

Industry regulation High Chemicals

(pollution, etc.)

Customs and tariff High Garment

restrictions abroad
 Remark

High

Public bus High

There are no such laws from the Governement for
in UK
the protection of industry

Software Low
Regulations are high because of reaons like usage
of water, pollution etc.

Software Low
Since, they are not daily essential products, tarrifs
on them are usually high
Barriers to entry 3.55
Rivalry among Competitors 2.625
Barriers to exit 2
Power of buyers 2.25
Power of suppliers 3.625
Threat of substitutes 3.5
Government action 1.33
Overall attractiveness 18.88