Analysis of Hitech Transformers

Rivalry Among Established Companies 4

Strategic Groups within Industries Model 7

Limitations of the Five Forces and Strategic Group Models 8

Hitech Transformers has been producing electrical components since its inception approximately fifty (50) years ago. The company has a simple range of product offering and unfortunately, has done little to change its strategic direction. Any new product development that has occurred, has been based on market perceptions as viewed from the eyes of the design engineers. Without any apparent real consideration for the needs and wants of the customer community, the failure rate of new products introduced into the marketplace has been high.

From the information provided it appears that Hitech Transformers has been running its business based on its own and potentially unqualified interpretation of what the marketplace is seeking. In short they are providing products that are desperately looking for solutions instead first properly identifying the problem, or class of problems that is needing to be solved within the marketplace, and then developing an appropriate solution.

At a minimum, Hitech would do well to fire their engineers and use the customer-centric data being continually gathe

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zed entities. Each customer is treated the same. The larger customers are becoming more demanding and wish to establish just-in-time (JIT) relationships with Hitech. Second, when the buyers purchase in large quantities. In these circumstances, buyers can use their purchasing power as leverage to bargain for price reductions. This factor comes into play in those situations where Hitech Transformers is selling to large companies. Third, when the supply industry depends upon buyers for a large percentage of its total orders. This factor also comes into consideration for Hitech Transformers. Fourth, when the buyers can switch orders between supply companies at a low cost, thereby playing off companies against each other to force down prices. This is also relevant in this situation. Fifth, when the buyers can use the threat to supply their own needs through vertical integration as a device for forcing down prices. This is not seen to be a factor in this situation, although it could arise in limited instances. Bargaining Power of Suppliers Suppliers are most powerful in the following circumstances. First, when the product or service sold (or provided) has few substitutes and is important to the buyer. In the case of Hitech Tra

Category: Science - A