How do demand and cost trends affect profitability and competitive advantage?
Not what you're looking for?
Do the following trends weaken or strengthen the competitive advantage of Shomei and to the other competitors in the greeting card industry? Why?
The 2 Trends affecting profitability to review are:
1. Increases in paper prices and payroll costs
2. The change in demand from seasonal to everyday cards.
See attached for industry and company backgrounds.
Purchase this Solution
Solution Summary
This solution provides descriptions of the trends that weaken or strengthen competitive advantage of a company and its competitors.
Solution Preview
The factors which have affected the greeting card industry are as follows:
1. Availability and price of raw material (Example paper) and pay roll costs
2. Government policy like taxes and duties on industry
3. Change in preferences of the customer
4. State of competition, both domestic and global
5. Production capacity and actual production
6. Economic situation and the inflation rate.
7. Growth in the industry
8. Political and governance situation
9. Change in socio cultural factors
10. Global competition
11. Availability of substitutes
12. Change in Technology like using egreeting
Impact of Trends
The greeting card industry is facing slowdown in the growth rate. It is around 3.8 percent compound annual growth rate and in future it is predicted lesser at 2.7 percent each year for the next five years. Average profitability margin of greeting card industry is at 12 percent. But the slow down in the growth rate ...
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Introduction to Finance
This quiz test introductory finance topics.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.