Product Life Cycle Concept Essay Example for Free

Product Life Cycle Concept EssayMichael doormans framework of competitive analysis is applicable to our production line organization known as D.T.DOBIE TANZANIA LTD which waterfall under the automobile manufacture in Tanzania and worldwide in the fol pocket-sizeding ways A.Barriers to entry/ holy terror of tonic entrants.Its true that the average person cant come along and start selling stag spick-and-span cars. The emergence of foreign competitors with the capital, required technologies and management skills began to undermine the grocery store sh be of flaw new car sellers. The following factors argon barriers to automobile sellers new entrants* Knowledge and TechnologyIdeas and fellowship of servicing its supplied products is the un opponentled that provides competitive advantage to D.T Dobie everywhere others. D.T Dobie uses machines of highest technology on checking and servicing its cars in which, gives them effect to provide guarantee of up to one year servic e to its product since they ar assured of what they atomic number 18 doing. The machines used by the skilled labor of D.T Dobie to service and check the product argon of high graphic symbol and they are actually expensive in much(prenominal) a way that for new entrants firm in that business its an ownership barrier.* Access to distri butionThe demand for brand new cars in Tanzania is very low since they are sold at price that individual cant afford. D.T Dobie is a great provider of brand new cars to Tanzania g everyplacenment institution, most United Nations (UN) organizations such as UNICEF, ILO, UNESCO, representatives offices in Tanzania and embassies offices. Since these agencies are the most buyers of brand new cars, it has do D.T Dobie to have almost the access to distribution bear of selling brand new cars in which this act as barrier to new entrants since the buyers are few.* constitute of entryInitial capital required to set up a new firm is very high, it makes the chances of new entrants to be very less. * Product divers(prenominal)iation and apostrophize advantageThe product has to be different and attractive to be accepted by the customers. D.T Dobie is the greater seller of brand new NISSAN, MITSUBISHI, MERCEDES BENZ, HONDA and HYUNDAI in which made them different from its competitor since it sells many brands than others. By being supplier of government cars has made them to be exempted when merchandise cars for government institution uses.B. Bargaining power of suppliersThe bargaining power of suppliers is also described as the market of inputs. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few put backs. Suppliers may refuse to work with the firm and also may transport excessively high prices for unique resources. For organization of our choice i.e. D.T Dobie its suppliers for motor vehicles are TOYOTA, NISSAN, MITSUBISHI and MERCE DES BENZ. D.T Dobie is the seller of brand new car in Tanzania where by its inputs i.e. imported new cars from great multinational companies are so primary(prenominal) for its survival, this leads the suppliers having great power over D.T Dobie since its not manufacturer but the buyer of finished product. addition in production cost to one of suppliers on specified product may lead to geological fault cost which will be relative to D.T Dobie switching cost.Degree of differentiation of inputs D.T Dobie suppliers confer different brands in which is difficult for them to switch from one supplier to another. For example if they are required by its customers i.e. government to supply cars thats engine capacity is V8 that pushes them to deal with TOYOTA since other suppliers are not producing cars with that engine capacity. For parts suppliers, the life span of an automobile is very authorized. The longer a car stays operational, the greater the need for replacement parts. On the ot her hand, new parts are lasting longer, which is great for dealrs, but is not such good news for parts makers.C. Bargaining power of customersBuyers impact to the customers who finally consume the product or the firms who distribute the industrys product to the final consumers. Bargaining power of buyers refer to the potential of buyers to bargain down the prices charged by the firms in the industry or to growing the firms cost in the industry by demanding better pure tone and service of product. Since our organization of our choice D.T Dobie supplies and sell brand new cars in Tanzania, its customers are few since who can afford to buy brand new cars are government institution, most united nations (UN) organizations such as UNICEF, ILO, UNESCO, representatives offices in Tanzania, embassies offices and individuals who can afford to do so. Since its customers scarcely want quality and guaranteed products this act as driving cram to D.T Dobie to supply not only quality products but also quality parts and servicing those cars for the whole year as guarantee afterward being sold out.Since D.T Dobie is greater supplier of brand new NISSAN, MITSUBISHI, MERCEDES BENZ etc. cars in Tanzania availability of alternate products such as FORD, RANGE ROVER, LAND ROVER which are supplied by its competitors like CMC motors and sold at said(prenominal) or at lower price than D.T Dobies have made some of its customers to lurch to those brands as its known customers are very sensitive to price. Most of those mentioned above customers purchase in large quantities. They have full information about the product and the market. They emphasize upon quality products. They pose credible threat of backward integration. In this way, they are regarded as a threat.D. Threat of Substitute ProductsSubstitute products are goods or services from outside a given industry that perform similar or the same functions as a product that the industry produces. Rather than looking at the thre at of someone get a different car, there is also a need to also look at the likelihood of people taking the bus, train or airplane to their destination. When determining the availability of substitutes time, gold invested, personal preferences and convenience in the auto travel industry should be considered. D.T.Dobie should consider the following factors when analyzing this force* Price BandThe threat that consumer will switch to a substitute product if there has been an annex in price of the product or there has been a decrease in price of the substitute product. If the price of the cars sold by D.T.Dobie will increase the main expected customers i.e. the one switching from rhythm to car will not move to car and will remain in the bike only. thereof the price is kept checked in this manner.* Substitutes performanceThe performance of the substitute sector also plays an important role in the success of the business. If the price of other dealers such as Africariers increases or the price knell of the small segment falls, it will have effect on the quantity required in the market. Its just on the price but also the features and the other services associated or it may be the status symbol story.* Buyers willingnessProducts with improving price/performance tradeoffs relative to present industry products. It will lay out the willingness of the buyer to buy from D.T.Dobie.The willingness of the customers to go forward to try the new product in the market such as Mercedes Benz reduces the threat from substitute products.E. agonistical RivalryThis force analyses the level of competition between breathing players in the industry. Because an industrys firms are mutually dependent, actions taken by one company unremarkably invite competitive responses. Thus in many industries firms actively compete against one another. Highly Competitive industries generally earn low returns because the cost of competition is high. The auto industry is considered to be an olig opoly (a market characterize in which sellers are so few that actions of any one of them will materially affect price) which helps to denigrate the price-based competition. Below are factors which are seen in this force* Price CompetitionAdvertising battles may increase total industry demand, but may be costly to smaller competitors. Products with similar function countersink the prices firms can charge. Price competition often leaves the entire industry worse off..* Product Quality change magnitude consumer warranties or service is very common these days. To maintain low cost, companies consistently has to make manufacturing improvements to keep the business competitive. This requires additional capital expenditure which tends to eat up companys earning. On the other hand if no one else can provide products/ services the way you do you have a monopoly. D.T.Dobie enjoys the monopoly of selling new cars are there are no competitors in this segment.* Unique Selling PointAlso D.T. D obie has advantage over its rivals because it represents a premium brand which is recognized over the world, they found a niche in the market where have a leading brand like Mercedes-Benzes a and a brand which people calculate to own .Also they are lucky to have Nissan one of the most renowned Japanese brands which is an equal anchor of their business.* ExpansionDT Dobie is looking to grow and move forward, both in its native Tanzania and in surroundings regions. By building strong relationships and working closely with strategic partners, DT Dobies footprint keeps on growing. Also they are expanding by appointing more dealers around the country.* InvestmentIn terms of investing in our own equipment, this takes antecedence they put all eyes on technology so they are not behind the moderation of the world. Even if the latest technical advancement s are available to the company, DT Dobie makes sure any investing is benefiting to the organization as a whole .Every five years D.T. Dobie has an equipment review which makes sure the company is on right track, ensures investments have been successful and assesses whether upgrades need to be made in order to reach the adjoining level, they are absolutely up to date. Also ensures that its vehicle testing equipment has modern standards which outnumber it from its rivals.CONCLUSIONIn general, any CEO or a strategic business manager is trying to steer his or her business in a direction where the business will develop an edge over rival firms. Michael Porters model of Five Forces can be used to better understand the industry context in which the firm operates. Porters Five Forces model is a strategy tool that is used to analyze attractiveness of an industry structure. Porters Five Forces model views the business from inside and outside. It focuses on assessing competitive position within the industry.