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Threat of New Competition & Intensity of Competitive Rivalry
Domestic competitors: According to exhibit one in the case, firecrackers and fireworks total revenue in China increased 36.01 percent from 2007 to 2009. As the hometown of firecrackers and fireworks in China, Liuyang naturally had increased revenue in firecrackers and fireworks. The revenue went up 68.33 percent from 750,000,000 USD to 1,262,500,000 USD. Moreover, fireworks industry is a low- technology and traditional industry. The initial capital requirement for starting a fireworks- manufacturing facility was relatively low, less than 20,000 USD. Those reasons contribute that there are 2,702 fireworks manufacturers in the Liuyang District with an additional 2,144 in the surrounding areas. Fortunately, most factories were dominated by small family-owned –and –operated workshops and most of the employees in the factories were regular farmers who had learned how to make fireworks just by watching and following their elders. As a result, those factories only manufactured fireworks instead of designing fireworks.
Strategy: I believe there still have opportunities in this sunset industry only the company can focus on the product diverseness and SOP control to have more competitiveness to their rivals. First, I will concentrate on R&D to produce the fireworks that can shoot with long distance and with much safety no matter during the process of manufacturing or launching. R&D department also has to develop more environment-friendly fireworks by changing the materials making fireworks. Every new year eve, most of the big cities in the world including London, Sydney, Dubai, Rio de Janeiro, Las Vegas, Taipei, Paris, Hong Kong, Prague will schedule the large-scale fireworks display events. (1) Those displays all are high altitude fireworks. Second, traditionally, fireworks are used in specific occasions such as Chinese new years, or the religious events. People launch fireworks and firecrackers to expel
Domestic competitors: According to exhibit one in the case, firecrackers and fireworks total revenue in China increased 36.01 percent from 2007 to 2009. As the hometown of firecrackers and fireworks in China, Liuyang naturally had increased revenue in firecrackers and fireworks. The revenue went up 68.33 percent from 750,000,000 USD to 1,262,500,000 USD. Moreover, fireworks industry is a low- technology and traditional industry. The initial capital requirement for starting a fireworks- manufacturing facility was relatively low, less than 20,000 USD. Those reasons contribute that there are 2,702 fireworks manufacturers in the Liuyang District with an additional 2,144 in the surrounding areas. Fortunately, most factories were dominated by small family-owned –and –operated workshops and most of the employees in the factories were regular farmers who had learned how to make fireworks just by watching and following their elders. As a result, those factories only manufactured fireworks instead of designing fireworks.
Strategy: I believe there still have opportunities in this sunset industry only the company can focus on the product diverseness and SOP control to have more competitiveness to their rivals. First, I will concentrate on R&D to produce the fireworks that can shoot with long distance and with much safety no matter during the process of manufacturing or launching. R&D department also has to develop more environment-friendly fireworks by changing the materials making fireworks. Every new year eve, most of the big cities in the world including London, Sydney, Dubai, Rio de Janeiro, Las Vegas, Taipei, Paris, Hong Kong, Prague will schedule the large-scale fireworks display events. (1) Those displays all are high altitude fireworks. Second, traditionally, fireworks are used in specific occasions such as Chinese new years, or the religious events. People launch fireworks and firecrackers to expel