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Industry Background Tiials pronaviy lie viyyesi ileal. John What makes the threat from new entrants such a big deal? John Select all that apply, then click Submit below Patents and regulations are not important in this industry. Industry Background Industry Background Facts Industry is projected to grow at 1.5%/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 Outsourced manufacturing makes it easy for anyone to enter the industry. Any new entrant needs to overcome network effects to get into the industry. Customers are not loyal to the brands already in the industry. There are lots of competitors that are all pretty much the same. Submit