4.Detailed industry overview and the likely impact of the trends in the industry environment
Porter’s Five Force Analysis of Panasonic
1. Threat of new entrants –
Threats of new entrants is relatively lesser in electronics market because the established brands like LG, SHARP and SAMSUNG are relatively senior players with higher brand loyalty and it is difficult to position a new brand against them. New entrants need to compete on following:-
• Economic scale – big players have a competitive advantage
• Investment capital – the higher R & D costs again is favorable for big players
• Distribution access – senior players enjoy a better distribution network and they offer better margins
• Brand loyalty - senior players have higher brand loyalty
• Government policy - strict patent issues in different geographies is which new entrants have to be wary of.
However Panasonic can take cue from LG which was able to lead electronic market share among its competitors .For ex: It used sports as a medium to promote its TV ,cricket in India, Football in Brazil etc.
2. Threat of substitute products or services – This element is quite high for electronics market as it is flooded with many substitutes and as consumer durables are often longer term purchases, companies like Panasonic have to be careful while deciding on the appropriate marketing strategy. Panasonic needs to adopt differential pricing so as to attract consumers from across the income pyramid to and provide substitute to the