HW_Week_3

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Macquarie University *

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3050

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Management

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Apr 3, 2024

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docx

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Uploaded by ChiefFalconPerson1058

1. Qantas (QAN) Woolworths Rivalry Moderate High Threat of new entrants Low Low Threat of substitute products Low High Bargaining power of suppliers High Moderate Bargaining power of buyers Moderate Moderate a) Qantas  Rivalry: Moderate . Qantas accounts for 58% market share of domestic airlines in Australia. However, there are a total of 106 enterprises in this industry. Virgin Australia emerges as the primary competitor, commanding a quarter of the market.  Threat of new entrants: Low . In Australia, airlines are required to possess an Air Operators Certificate according to the regulations outlined in the Civil Aviation Act of 1988. Moreover, the airline industry requires significant capital investment, resulting in a low threat of new entrants.  Threat of substitute products: Low . While there are some substitutes for air travel, such as other modes of transportation like trains or cars for shorter distances, air travel remains the most efficient and preferred mode for long-distance travel.  Bargaining power of suppliers: High . Airlines face limited bargaining leverage when it comes to negotiating fees for navigation and air control services at airports. This is because airports typically function with constrained capacity and often hold a geographic monopoly. Aviation fuel, being the primary input for airlines, constitutes a significant portion of their operational costs. Due to the essential nature and restricted availability of aviation fuel, airlines are forced to accept the majority of any price increases initiated by suppliers.  Bargaining power of buyers: Moderate . The low switching cost and the presence of numerous airlines offering similar services at comparable prices to Qantas increases the bargaining power of customers. Woolworths  Rivalry: High . Woolworths accounts for 37% market share of supermarkets and grocery stores in Australia. The industry is highly diffuse with 2191 players competing for market share. Moreover, the emergence of online retailers like Asian Grocer Online and Good Groceries also adds competition.  Threat of new entrants: Low . Entering the market entails significant time and expenses for new firms, especially given the solid position of established players like Woolworths. New entrants must present a distinctive value proposition to stand out. Additionally, they'll encounter challenges accessing logistics and supply chain networks.  Threat of substitute products: High . Since there is a broad range of goods on offer, the customers will prefer the most efficient and economical product. Moreover, products such as groceries have very low switching costs. The availability of price and product

information has also increased substitution as consumer is able to make more informed purchase decision.  Bargaining power of suppliers: Moderate . Retailers such as supermarkets and grocers gain increased control over their pricing through wholesale bypass. Since Woolworths is a strongly established brand, many suppliers compete amongst themselves to provide the most competitive quotes and terms to the company. Despite that, the process of switching suppliers entails significant costs in terms of analysis, negotiation efforts, time investment, and operational adjustments.  Bargaining power of buyers: Moderate . The grocery industry is dominated by its three major players, restricting choices for consumers. However, they can easily switch between competitors based on factors such as price, quality, and convenience. This level of buyer power puts pressure on Woolworths to offer competitive pricing and customer service to retain customers. b) According to my ratings, Qantas could potentially achieve higher returns over the next five years compared to Woolworths due to its smaller level of rivalry, insignificant threat from substitute products and slightly lower bargaining power of buyers. c) Qantas faced a greater impact from COVID-19 due to its core operations being severely affected by the pandemic. The imposition of travel restrictions and border closures, implemented to mitigate the spread of the virus, resulted in a significant reduction in passenger numbers. Meanwhile Woolworths offers products that cater essential customer needs and it can overcome restrictions and distancing regulations by selling online. 2. In the solar panel production industry, while cost leadership is important, differentiation often provides a more sustainable competitive advantage. For example, Longi, which holds the largest market share in China, prioritizes the production of high-efficiency monocrystalline panels. While Longi panels typically come with a higher price tag, the better energy efficiency and lower degradation speed are what make their products stand out. Since installing a solar system is already very expensive in general, customers tend to prioritize long-term quality over opting for the lowest price available. This emphasis on superior technology and performance allows Longi to command premium prices and build a strong brand reputation. The likelihood of this advantage being sustained is high as long as companies maintains their commitment to product quality and technological leadership. 3. Uber Industry: Ridesharing Services in Australia Rivalry: High. The emergence of new ridesharing platforms is increasing competition, while other transportation alternatives are also adding competitive pressures from outside the market. Threat of new entrants: Moderate. Although the initial costs of purchase are minimal and setting up operations can be relatively inexpensive, substantial capital is still necessary. This is because start-up companies need to frequently offer price reductions.

Threat of substitute products: High. Taxi is the direct substitute service to ridesharing since it is basically the same service. Other transport methods need to mention are cycling, public transport and private vehicle. Public transportation typically presents a more cost-effective option for travel, while cycling provides a healthier alternative compared to ridesharing. Private vehicles may also prove to be more economical over time, especially for individuals who frequently drive or cover long distances. Bargaining power of suppliers: Moderate. Uber's drivers can choose to work for competing ride-hailing services or traditional taxi companies. However, Uber's large customer base and incentives for drivers, such as flexible work hours and earnings potential, help mitigate this bargaining power. Bargaining power of buyers: High. When it comes to traveling, the majority of customers prioritize cost- effectiveness and convenience. They will switch between different ridesharing apps, conventional taxis, and alternative transportation methods to discover the most suitable option. These forces don’t explain for Uber success. The reasons for Uber's success lie on its inventive business model, easy-to-use application, and extensive driver network. Based on my predictions for the competitive forces in the industry, Uber's profitability is expected to experience a notable rise as it continues to recover its potential, provided that no adverse events occur. The implementation of travel restrictions and border closures during 2020 to 2021 had a detrimental impact on Uber's revenue. Nevertheless, the company's image and brand reputation remain intact despite the pandemic. Therefore, following the pandemic, there is a strong likelihood of renewed consumer trust and increased usage of Uber services. 4. Toyota is one of the few companies capable of implementing a hybrid strategy that balances cost leadership and differentiation. Through implementation of lean manufacturing and a strong culture of continuous improvement, Toyota minimizes waste, optimizes production efficiency, and cultivates cumulative experience among its employees. These practices enable Toyota to achieve cost leadership and gain an advantageous position in the automotive industry. Toyota's competitive advantage also lies in its differentiation strategy, which emphasizes quality and reliability features. The company utilizes an automated system that halts production upon error detection, ensuring that defective output is prevented and product quality is maintained. This focus on quality and reliability distinguishes Toyota from other automotive companies, setting it apart in these aspects.

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