HILTI CORP 5forces
HILTI CORP - Industry Analysis
PORTERS 5 FORCES
1. Extent Competitive Rivalry
Few but strong players in this strategic group The construction tool industry is huge and has the propensity to shift with shift in economic dynamics – Economic growth, GDP
Requires substantial capital due to fixed and variable cost
Wide range of products in variety of market segments within Few competitor with differentiation strategy
Industry is driven by high level of technology and innovation, this could be a barrier to entry
2. Barrier to Entry
High Setup cost investment in technology and r&d
The premium segment requires continuous innovation hence location is key to sustainability Fierce resistance Feasible entry strategy is JV and M&A Multichannel route to market
3. Buyer Power buyer choice High buyer choice buyer Buyers range from independent professionals to multinational constructions corporations
Prices are fairly standardized with little or no fluctuations
4. Supplier power
Strong brand reputation
Global geographical coverage
Premium quality product
Premium quality services product
Collaborative relationship with suppliers
5. Threat of Substitute
Product and Technology Development
Hilti is strategically positioned as an innovator in the industry hence the likelihood of switching would not be high in terms of price and quality of its products. Direct sales force allows Hilti to build and retain relationships with customers
Change in technological advancement facilitates the innovation and new product offerings.
PERFORMANCE METRICS
QUALITY
-Raw material quality
-Product quality
-Order entry accuracy
-Warehouse picking accuracy
COST
-Material cost
-Labor cost
-Overhead costs
-Storage costs
-Logistics costs
DELIVERY
-Order processing time
-Manufacturing lead time
-Procurement lead-time
-Shipment time
-Warehousing picking time
FLEXIBILITY
-RM inventory days
-FG inventory days
-GIT inventory days
-Distributors inventory days
PORTERS 5 FORCES
1. Extent Competitive Rivalry
Few but strong players in this strategic group The construction tool industry is huge and has the propensity to shift with shift in economic dynamics – Economic growth, GDP
Requires substantial capital due to fixed and variable cost
Wide range of products in variety of market segments within Few competitor with differentiation strategy
Industry is driven by high level of technology and innovation, this could be a barrier to entry
2. Barrier to Entry
High Setup cost investment in technology and r&d
The premium segment requires continuous innovation hence location is key to sustainability Fierce resistance Feasible entry strategy is JV and M&A Multichannel route to market
3. Buyer Power buyer choice High buyer choice buyer Buyers range from independent professionals to multinational constructions corporations
Prices are fairly standardized with little or no fluctuations
4. Supplier power
Strong brand reputation
Global geographical coverage
Premium quality product
Premium quality services product
Collaborative relationship with suppliers
5. Threat of Substitute
Product and Technology Development
Hilti is strategically positioned as an innovator in the industry hence the likelihood of switching would not be high in terms of price and quality of its products. Direct sales force allows Hilti to build and retain relationships with customers
Change in technological advancement facilitates the innovation and new product offerings.
PERFORMANCE METRICS
QUALITY
-Raw material quality
-Product quality
-Order entry accuracy
-Warehouse picking accuracy
COST
-Material cost
-Labor cost
-Overhead costs
-Storage costs
-Logistics costs
DELIVERY
-Order processing time
-Manufacturing lead time
-Procurement lead-time
-Shipment time
-Warehousing picking time
FLEXIBILITY
-RM inventory days
-FG inventory days
-GIT inventory days
-Distributors inventory days