The Chinese Fireworks Industry
The Chinese Fireworks Industry
While the Liuyang fireworks industry dominated the worldwide industry, Jerry had to decide whether he should invest in the industry. If he did invest, what was the best way to capitalize on the potential that remained unexploited in this industry? He wondered whether he could apply the industry analysis framework he had studied in his MBA program.
Facts:
Total revenue increased in China from 2007 to 2009 by 36%
Total revenue in Liuyang increased by almost 68% from 750k to 1,26 MM
Low cost of entry as traditional fireworks industry in China are antiquated and old fashioned
High concentration of family run businesses with local population as workers
Below is an estimation of SWOT analysis on Mr. Yu
Strengths
1. MBA
2. Chinese Background
3. Business experience in USA
Weakness
1. No experience in Firework Industry or in the manufacturing sector
2. Distance factor – Mr. Yu is based in USA
Opportunities
1. United States is the number 1 importer of Chinese Fireworks
2. High demand for Chinese Fireworks
3. Scope for improvement and exploration in new technology
Threats
1. Age old industry with many competitors
2. Chinese regulations are completely different than American regulations
3. Business with family
Below is an estimation of SWOT analysis on the Fireworks Industry
Strengths
1. Labor Cost
2. Variety
3. Cost of material
4. Brand perception
Weakness
1. Existing Competition
2. Lack of well-trained labor
3. Lack of technology
Opportunities
1. Internet Sales
2. New designs
3. Destination based marketing
Threats
1. Regulations
2. Competition
3. Environmental Issues
Porters Five Force Analysis
Bargaining power of suppliers
Diverse distribution channel - The more diverse distribution channels become the less bargaining power a single distributor will have. This positively affects Chinese Firework Industry. … "Diverse Distribution Channel (Chinese Firework Industry)" has a significant impact, so an analyst should put more weight into it.
While the Liuyang fireworks industry dominated the worldwide industry, Jerry had to decide whether he should invest in the industry. If he did invest, what was the best way to capitalize on the potential that remained unexploited in this industry? He wondered whether he could apply the industry analysis framework he had studied in his MBA program.
Facts:
Total revenue increased in China from 2007 to 2009 by 36%
Total revenue in Liuyang increased by almost 68% from 750k to 1,26 MM
Low cost of entry as traditional fireworks industry in China are antiquated and old fashioned
High concentration of family run businesses with local population as workers
Below is an estimation of SWOT analysis on Mr. Yu
Strengths
1. MBA
2. Chinese Background
3. Business experience in USA
Weakness
1. No experience in Firework Industry or in the manufacturing sector
2. Distance factor – Mr. Yu is based in USA
Opportunities
1. United States is the number 1 importer of Chinese Fireworks
2. High demand for Chinese Fireworks
3. Scope for improvement and exploration in new technology
Threats
1. Age old industry with many competitors
2. Chinese regulations are completely different than American regulations
3. Business with family
Below is an estimation of SWOT analysis on the Fireworks Industry
Strengths
1. Labor Cost
2. Variety
3. Cost of material
4. Brand perception
Weakness
1. Existing Competition
2. Lack of well-trained labor
3. Lack of technology
Opportunities
1. Internet Sales
2. New designs
3. Destination based marketing
Threats
1. Regulations
2. Competition
3. Environmental Issues
Porters Five Force Analysis
Bargaining power of suppliers
Diverse distribution channel - The more diverse distribution channels become the less bargaining power a single distributor will have. This positively affects Chinese Firework Industry. … "Diverse Distribution Channel (Chinese Firework Industry)" has a significant impact, so an analyst should put more weight into it.