Chinese Fireworks Industry
The Chinese Fireworks Industry In order to understand the attractiveness of the Chinese fireworks industry there are several things that need to be analyzed. We have included the analysis of the industry as a whole, the competitiveness of the industry, the driving forces, the key success factors, and the government and economic sanctions that are involved. ... Jerry Yu on whether or not to invest in the industry. Industry and Competitive Analysis The purpose of the Industry and Competitive Analysis is to identify important characteristics of the industry. Dominant Economic Features: Market size: The fireworks market is worldwide with customers buying both display fireworks and consumer fireworks. ... Customers: Worldwide customers purchase display fireworks and consumer fireworks. ... Ease of entry/exit: There is a low barrier of entry into the industry due to relatively low capitol requirements for both large shell display capacity and consumer capacity plants. ... However, lower quality products sold at a lower price can sometimes be fatal to a company in this industry. ... Only a small amount of capitol is required for starting a fireworks manufacturing facility. ... Because of increased concern over environmental and human safety, many countries have regulated the use of fireworks and firecrackers; the entry costs have only risen slightly. ... Because fireworks combine sensory stimuli of audio, visual, and emotional capacities, substitute products are weak and do not threaten the fireworks industry. ... The materials that are used to manufacture fireworks and firecrackers are easy to attain at prices that are relatively stable. ... Exports make up most of the demand for fireworks, and these foreign importers have a large amount of bargaining power because of the similarity of products among competitors. ... Especially among display fireworks buyers, there is a great deal of competitive importance of seller-buyer strategic partnerships. ... These are significant driving forces and each one could affect the industry in many different ways. ... A company can start with little capital, but survival is unlikely in the Chinese industry. ... Key Success Factors Product satisfaction, superior customer service, strategic marketing, product innovation, cost efficiency, and lighter restrictions on sales are all key success factors within the fireworks industry. There are several more factors that can determine success within the industry but these are key to the survival. Product superiority along with cost effectiveness will allow a company to survive in this industry all other factors remaining the same.