THE DICE STRATEGY PRESENTS
THE CHINESE FIREWORKS
INDUSTRY CASE
BUSINESS
STRATEGY
CLABE 2016
Jerry Vu’s dilemma- to invest or not to invest
JERRY
YU
American
has, to
decide, to
invest
in the fire
He has
to– An
analyze
industry
–past
current
and
prospects
an
What
should
hethe
doborn
? Chinese
PRELEMINARIES
Origin= China
Fireworks associated historically with
..CONT
HISTORICAL TRENDS
ShiftFACTORIES
LABOR
PRODUCT
INNOVATION
CONCERNS
BIG
GOVERNMENTS
NOW
LOCAL
from
NEW
PROTECTIONISM,
SKILLS
MAKING
fireworks
SUBSTITUTESRAISED
LIMITED
IMPROVED
BROKEN
–OFFENSIVE
PROCESS
FOR
toTO
firecrackers
SAFETY
UP
LEGAL
VARIATIONS.
LASER
–FAMILY
STRATEGY
AND
RESTRICTIONSIN
BEAMS,
TECHNOLOGY
PRODUCTION
OWNED
AND
MAKE
REGULATION
SMALL
BELIEVE
DOMESTIC
NOT
AND
WORKSHOPS
CHANGED
USAGE
FIRECRACKERS
MARKET IN D
FIVE FORCES MODEL
THREAT OF NEW ENTRANTS
The Customers
low concentration
are easy
ofto
the
reach
industry allows new entrants to be safe ag
CUSTOMERS ARE EASY TO REACH
Exports: Agents that contact firms directly
Invited bidding for display fireworks
Wholesalers for consumers fireworks
Distribution Channels are relatively easy to reach:
Imports:
LOW CAPITAL REQUIREMENTS
Labor is cheap and easily accessible in
NO COST ADVANTAGES FOR ESTABLISHED
FIRMS
The absence of administrative costs and R&D makes small firms more c
VERDICT
HIGH THREAT OF NEW ENTRANTS
THE BARGAINING POWER OF
SUPPLIERS
RAW MATERIALS : gunpowder, color ingredients ,paper, fuse, an
VERDICT
Easily available raw materials resulted in LOW
BARGAINING POWER OF BUYERS
DOMESTIC
FOREIGN CUSTOMERS
CUSTOMERS
DOMESTIC CUSTOMERS
Central and Local governm
FOREIGN CUSTOMERS
Possess high bargaining power due to:
EXPORT VS DOMESTIC
MARKETS
VERDICT
HIGH FOR FOREIGN MARKET
THREAT OF POTENTIAL
SUBSTITUTES
Technology has facilitated the...