For God and Coca-Cola - Case Study Example

Organisation, Competition and Environment Case The major influencing factors affecting demand has been the rise in the level of interest in fitness among all levels of people. The other important factor has been the interest in team sports which has also contributed to significant change in demand for those goods. Younger generation has taken up interest in high profile sporting events along with the middle income group. The fitness fanaticism has influenced major sporting events especially sports that were just played for the sake fitness. Typically, this has affected sports like swimming, weight lifting, other gym activities and keep fit activities. We find that swimming goods and articles associated with swimming has been selling more rampantly than goods related to any other sporting event. While 19% of the people preferred swimming for their health reasons, 18% went to the gym and did weight lifting or other such gym related activities. The keep-fit equipments and users roped in 14% of all those interested in maintaining their health. The other major influencing event was the team related sports. This influence affected the market conditions of the football specifically and to some extent rugby and cricket. More than Three hundred and sixty million pound sterling was spent by soccer enthusiasts on products and articles relating to soccer in 1998. This increase in demand in these two sporting events have happened due to the changed interest in the general health conditions among the public. Case 2: Q1. How might Obut and Boules have been able to build up a dominate position in the industry When Obut and Boules started to manufacture French Boules there were not many manufacturers and they were able to corner the entire market since they were the first entrants. Second, they also ensured that their secrets of trade are not known outside and maintained absolute quality. This made sure that they retained their market share in the country and in Europe. Q2. What would be the likly impact on consumers of the monopolistic position The customers, though they got quality product from these two producers, the price levels should have been higher. The customers were probably paying more than what is due.The products were selling at a premium. Q3. Why have the French introduced a 'Norme Francaise' There have to be a standard for the products that are rolling out and the customers need to be aware of what is happening in the market. In order to ensure that the sold boules are of specific quality, a Norme Francaise has been introduced. Q4. What will be the impact of this standard on the industry The impact of this standard is that the sale of these products have become illegal and they are sold in their own way illegally. However since it is dominated by two of the manufacturers, a standard does exist without a written rule for the quality of the boules. Industry as such is only between the two manufacturers. Q5. What will happen to competition in the longer term in this industry If the competition tries to produce the same kind of boules without improving upon the quality they will have a natural and slow death. Even if they sold the boules at much cheaper price, it may not be accepted by the players. Therefore if the competition wants to sustain and grow in the industry they should ideally, look it setting right their lacuna and build a better product to increase their market share. Case 3: Q1. Explain the changing pattern of supply in the cinema industry from 1946 onwards. The cinema industry in 1945 Briton has been booming when it was in its peak of 1.645 billion admissions in 4600 theaters. The initial high admissions during the 1945 to 1950 period is primarily due to the new trend in entertainment set by these theaters. People seem to love it and wanted to have all of it and more. The growing trend gradually declined. One of the major contributors to the steady decline is the television and the increased viewer ship that it brought along. The TV was the theater in every one's living room. The admissions to the theatres steadily declined to an abysmally low figure of 54 million admissions in 1984. In order to cope with this situation and to make sure that people do visit theatres, a large investment in theatres were made in the form of multiplexes. The conditions in the theatres were improved. Better seats, more and better restaurants and service at the seat. All these improved theatre conditions and continuously better marketing effort, contributed to the cinema industry picking up in 2002 to reach a figure of 185 million admissions. The number of theaters in Briton is also taking a turn for the good. All these would not have happened but for the creativity of the theatre owners and the kind of investment they were willing to make along with the comfort factor that they were able to give to the visitors. Q2. What has triggered off the increase in supply in recent years The increase in the demand for the theatres is primarily attributed to the large investments that has gone in to the theatres, better marketing and large multiplexes, the way US companies have made. Better facilities in terms of good seats, larger parking lots, good eateries and other entertainments have all contributed to the increase in supply in the recent years. Q3. Which of the supply factors have been most important in creating the change One of the biggest supply factors which have been very critical and brought in the entire change in the cinema industry has not been listed in the discussion of this case study. The fall of cinema was accompanied by the rise of the television. The programs that are aired in the television channels replaced the effectiveness of the cinema theatres and spelled the death knell for the cinema halls. This was the major supply factor that affected the change in the cinema theatre business. Explain ways in which an organisation may gain competitive advantage *Use examples to illustrate the the relationshuip between market forces and organisation responses OUTCOMES Investigate the main external factors which influence the organization Competitive advantage is gained by a company by various reasons as depicted in the above three case studies. 1. Changing pattern in the consumption of a good could result in a specific advantage for the entire market segment. However, the change may affect the marketed products from a specific company and could turn the entire tide in its favor. In case of the sports goods market, the health consciousness of the people has turned the market upside down. Though the market took a upturn and all the sporting goods got sold, specifically certain varieties of sporting goods got affected positively than others. Swimming, Football and golf took a rather, larger positive turn compared to the other products and the associated games. You may classify these reasons as external reasons that are not under the control of the company. However, it is also known in some of the other products elsewhere like the skin creams in the market, the market is built and developed by these companies to add to their business. External factors have played a key role in deciding on the competitive edge of the organizations. However, it should also be noted that even though the environment provided for it as an external agency, it is also the companies positioning that made them to be there on that day at that place. 2. Companies may gain competitive advantage by their birth. They are created for a specific product at a specified period to cater to a group of people. Over a period of time, they become specialists in that product and tend to control the entire market for that product. This results in companies gaining undue advantage over any new entrant, taking the entire market into a monopolistic behaviour. Similarly, it is also possible that some of the companies by the simple reason that they were started ahead of their rivals create a ruling brand name in the market that becomes very difficult for the competition to break or make headway by pushing them out. This also results in monopolistic attitude. This happened in companies like Coco-cola1, Microsoft and many others. 3. The third kind of gain normally registered by the companies is through sheer innovation. As in the case of the cinema theaters, they were in for a major drift in their business and almost went down to closing down the entire industry was resurrected because of an innovative move. The cinema's death knell was the television which was a new innovation and led the fall of the cinema which itself rose to a high plane due to its own innovation originally in 1940s. The same way a new innovation in the way the cinema theaters were organized and packaged led the change in the market conditions for the product. The product was made more attractive and became a cultural change in bringing about a strong desire to go out to movies again. This was a competition between two products, the theatre on one side and the television on the other. Though the theatre by itself may not beat the television out of the homes, it certainly would corner its own share in the market. There are both external and internal factors that influence the predominance of an organization in the market conditions2. By looking at the examples that we have discussed so far, we could see that the external factors primarily are: 1. New inventions that could replace the existing product 2. New suppliers from abroad or inland who could provide the product at much lesser cost. 3. Public concern or consciousness. All these external factors could affect the normal operation of a company and its market. The market conditions get altered due to other extraneous reasons as well like the government and the failure or success of other competitors. Internal factors that affect an organizations market include: 1. Innovative ideas and concepts that will push the product and hence the company also to a success. 2. Investments into the product 3. Quality of product and its service All these internal factors contribute to the change in a company's market position resulting in either growth or fall of the company. Read More