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Hall

Porters Five Forces: New Lights for Classic Styles

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Industry Background

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Hall Porter's Five Forces: New Lights for Classic Styles Return to Activity Score va Industry Background Materials It may not be the biggest threat, but the threat from rivals is definitely a concern. John What makes the threat from rivals such a big deal? John Select all that apply, then click Submit below There are lots of competitors that are all pretty much the same. Industry Background Industry Background Facts Industry is projected to grow at $1\mathrm{.}5\%/$year for the next few years Lighting fixtures industry is roughly $$4$ billion worldwide Manufacturing $.$ Mostly smaller manufacturers Few, if any, manufacturers have a recognized brand Popular designs are rapidly copied Patents offer little protection Technology for internet$-$connected smart fixtures is growing slowly Creating specialized production lines is necessary Distribution Channels Many smaller manufacturers sell directly through large retailers such as Home Depot, Target, and Walmart Some retailers offer their own private label brands Large manufacturers sell directly through their websites $($as well as through retail$)$ Individuals often compare prices across all channels before making a purchase Suppliers Primary materials are commodities like metal, wood, plastic, and glass $.$ Most manufacturers use a wide variety of suppliers for these commodities Each commodity has a large number of suppliers from which to choose Startup Process An efficient factory can cost between $$15-50$ million dollars Outsourced manufacturing can reduce initial costs for a niche player to less than $$100,000$ The regulations are simple and straightforward for lighting fixtures Marketing expenditures can be controlled through targeted ads It's easy to exit the industry by selling off production or cancelling outsourced production. There's not much room to differentiate products in this industry. Outsourced manufacturing makes it easy for anyone to enter the industry. The industry is only growing at $1\mathrm{.}5\%$ per year.