Industry analysis
Based on the IBIS World analysis, Breville Group Limited mainly focuses on two industries, including Household Appliance Wholesaling, and Kitchen and Diningware Wholesaling in Australia. From the perspective of barriers to entry, it is rather low, because there is no licensing requirement, government regulations or resource constraints that is critical to fail the new players. However, the significance for the industry is to provide goods on a timely basis for Breville as a wholesaler. The facility requires the high capital investment to deal with the production of wide range of products (Magner, 2015).
The bargaining power of customers is rather high. In current years, the consumers expected low costs appliances, because of the economic conditions. Woolworths and Coles group provides the low cost appliances, which pushes the retailers to keep lowering the price for products. Meanwhile, because of the increasing demand for innovation, Breville must respond to trend in innovation, and energy efficiency (Magner, 2015).
The bargaining power of suppliers is medium. The key cost element is wages expenses that rank the second-largest. One of the key departments is the research and development facilities that are significant to respond to fast changing in product demand (Magner, 2015).
The competition from rivalry is high, which is expected to be even higher. Price competition has become the critical element in the industry. Retailers prefer to pay lower price for a given product to maximize the profit, such as kettles, toasters, coffee machines, sandwich presses and rice bookers. Apart from price pressure, the high quality products are expected, especially in energy efficiency rating. Meanwhile, the competition is expected to be severe in the product range, marketing, size of operations and reputation (Magner, 2015).
Reference:
Magner, L., 2015, ‘Household Appliance Wholesaling in Australia’, viewed 11 March 2015 from IBISworld
The bargaining power of customers is rather high. In current years, the consumers expected low costs appliances, because of the economic conditions. Woolworths and Coles group provides the low cost appliances, which pushes the retailers to keep lowering the price for products. Meanwhile, because of the increasing demand for innovation, Breville must respond to trend in innovation, and energy efficiency (Magner, 2015).
The bargaining power of suppliers is medium. The key cost element is wages expenses that rank the second-largest. One of the key departments is the research and development facilities that are significant to respond to fast changing in product demand (Magner, 2015).
The competition from rivalry is high, which is expected to be even higher. Price competition has become the critical element in the industry. Retailers prefer to pay lower price for a given product to maximize the profit, such as kettles, toasters, coffee machines, sandwich presses and rice bookers. Apart from price pressure, the high quality products are expected, especially in energy efficiency rating. Meanwhile, the competition is expected to be severe in the product range, marketing, size of operations and reputation (Magner, 2015).
Reference:
Magner, L., 2015, ‘Household Appliance Wholesaling in Australia’, viewed 11 March 2015 from IBISworld