FIRMS IBM

FACTORS

Breakthrough microprocessor architecture

that puts broadband communications right
VISION on the chip

At IBM, we strive to operate in the invention,

development and manufacture of the
industry's most advanced information
technologies, including computer systems,
software, storage systems and
MISSION microelectronics
ENVIRONMENTAL FACTORS
 In general international operations are highly
influenced by the governmental policies and
their laws, but In this case there is little
effect because most of countries are looking
for developments and new technologies. -
Heavy taxes in some countries make IBM
political factors increase its products price
 National growth rates.
- Fuel Prices
economic factors
 Positive customers' perception toward new
technology around the world. Increase in
social population and internet users.
 Advanced technology development.
- Internet
- Increase numbers of companies that need
technology ERP made
IBM systems
the some of the major
technologies like to trace weather
throughout the world.
environmental FACTORS
Cyber protection and the chemical the use in
making hardware; like carbon, germanium,
and silicon
Currency exchangeLegal registration for their
business outsourcing facilities
legal

PORTERS 5 FORCES
 The threat of entry is low because the costs
of R&D, support products and services,
threat of entrants/barriers to entry manufacturing, and distribution are very high

The power of buyers is high because the

switching costs for buyers are low; there are
bargaining power of buyers also many product choices for the buyers.
 There are two biggest processor suppliers in
the world who have very strong power on the
chip supplying.
However, the power of supplier for other low
required materials and parts is lower than
the main suppliers
bargaining power of suppliers

The web hosting business of other companies

and some advanced devices and computers
threat of subsitutes could cause threat of substitutes
 The strength of competition in this industry is
very high; the main rivals are HP,
Microsoft, Dell, and Fujitsu Siemens
Computers, they compete with international,
competitive rivalry national, regional, and local
COCA COLA COMPANY WALMART

To put all small business owners out

of business and give everyone no
choice but to buy cheap imported
goods from their stores (which they
want to be the only shopping choice
you have).
To maintain our reputation as the leading
cola company in the world.
Everything we do is inspired by our enduring
mission:
• To Refresh the World... in body, mind, and
spirit.
• To Inspire Moments of Optimism... through
our brands and our actions.
• To Create Value and Make a Difference...
everywhere we engage To give ordinary folk the chance to
buy the same thing as rich people

Like most companies, Coca-Cola is
monitoring the policies and regulations set
by the government. There are no political
issues in this instance.
The political influences in this
industry is probably the most burning
concern with organizations
going global and many countries
restricting the growth of companies
by many countries.
European Customs and Regulations
heavily hamper expansion plans. FDI
in many countries are
still heavily regulated and global
companies are yet to set foot into
emerging markets like India.

There is low growth in the market for
carbonated drinks, especially in Coca-Cola’s and China will impact growth of
main market, North America. The market
growth recorded at only 1% for North
America in 2004.
The recent financial crisis has had a
negative impact on consumer
spending and outlook.
Disproportionate levels of income and
consumer spending in developing
countries like India
global companies. Exchange rates
affect global sourcing and
pricing policies on a day to day basis.
 Developing countries are not used to
push type marketing and aggressive
selling. Bulk buying
patterns predominantly present in
There are changes in consumers’ lifestyles. USA, is non-existent in Asian
Consumers are more health conscious. This countries. Language and
affects the Coca-Cola’s sales of the cultural factors is a barrier to
carbonated drinks as consumers prefer non- globalization. Anti-Globalization
carbonated drinks such as tea, juices and movements in the recent past
bottled drinks. Demand for carbonated has affected growth of global
drinks decreases and this leads to a companies, especially companies
decrease in Coca-Cola’s revenues originated USA.
As the technology advances, new products
are introduced into the market. The advance
in technology has led to the creation of
cherry coke in 1985 but consumers still
prefers the traditional taste of the original
coke.
Development in technology and
satellite systems has given a boost to
Wal-Mart. Basic
infrastructure still lacks for effective
warehousing and distribution, the
lifeline of a retail chain.
The several factors that make it very difficult
for the competition to enter the soft drink
market include:• Bottling Network: Both
Coke and PepsiCo have franchisee
agreements with their existing bottler’s who
have rights in a certain geographic area in
perpetuity. These agreements prohibit
bottler’s from taking on new competing
brands for similar products. Also with the
recent consolidation among the bottler’s and
the backward integration with both Coke and
Pepsi buying significant percent of bottling low to medium-high investments
companies, it is very difficult for a firm costs;extensive investment in
entering to find bottler’s willing to distribute IT;distribution network;sale and scope
their product.ad spend;brand image;retailer of opertaions is high;regulatory
shelf space; concerns

The major channels for the Soft Drink

industry are food stores, Fast food fountain,
vending, convenience stores and others in
the order of market share. The profitability in it is the only store in many locations
each of these segments clearly illustrate the isolating competitions and limiting
buyer power and how different buyers pay consumers choice; attractive and
different prices based on their power to probably the best pricing so low
negotiate power
• Commodity Ingredients: Most of the raw
materials needed to produce concentrate are
basic commodities like Color, flavor, caffeine suppliers have lost power over pricing
or additives, sugar, packaging. Essentially and other terms due to walmart's
these are basic commodities. The producers size;wal mart is key customer to most
of these products have no power over the of the suppliers and therefore they
pricing hence the suppliers in this industry depend on it; walmart in aggressive
are weak selling

Large numbers of substitutes like water,

beer, coffee, juices etc are available to the
end consumers but this countered by
concentrate providers by huge advertising,
brand equity, and making their product
easily available for consumers, which most
substitutes cannot match. Also soft drink low to medium- department stores
companies diversify business by offering charge higher prices;walmart has all
substitutes themselves to shield themselves types of formats serving all types of
from competition. customers;
The Concentrate Producer industry can be
classified as a Duopoly with Pepsi and Coke
as the firms competing. The market share of
the rest of the competition is too small to
cause any upheaval of pricing or industry
structure. Pepsi and Coke mainly over the
years competed on differentiation and
advertising rather than on pricing except for
a period in the 1990’s. This prevented a
huge dent in profits. Pricing wars are
however a feature in their international pricing wars has reduced margins
expansion strategies from 6 to 1 %
INDIAN PHARMA INDUSTRY SOAP INDUSTRY
Effective January, 2005 the country
goes in for the IPR (Intellectual
Property Rights) regime, popularly
known as the Patent Act. This Act
will impact the Pharmaceutical
Industry the most. Thus far an
Indian company could escape
paying a patent fee to the inventor
of a drug by manufacturing it using
a different chemical route. Indian
companies exploited this law and
used the reverse-engineering route
to invent a lot of alternate
manufacturing methods. A lot of
money was saved this way. This also
encouraged competing company to
market their versions of the same
drug. That meant that the
impurities and trace elements found
in different brands of the same
substance were different both in
qualification as well as in
quantum.Therefore different brands
of the same medicine were truly
different. Here Branding actually
meant quality and a purer brand
actually had purer active ingredient
and lesser or less toxic Earlier the soap industry was under
impurities.Product patent regime the Licence-raj restrictions. But,
will eliminate all this. Now, a after liberalization of economy by
patented drug would be the Narshima Rao government there
manufactured using the same has been a spurt in the number of
chemical route and would be players in the organized as well as
manufactured by the inventor or his the unorganized sector. A player like
licentiates using the chemicals with Henkel SPIC is good example of this.
same specifications. Therefore, all The political system in India is
the brands of the same active undergoing vast change. There has
ingredient would not have any been competition between various
difference in purity and impurities. states like Maharashtra, Gujarat,
The different brands would have to Andhra Pradesh and Madhya
compete on the basis of non input- Pradesh. The sops given to new
related innovations such as entrants like sales tax concessions
packaging, color, flavors, Excipients and other incentives help encourage
etc. This is the biggest change the players to open their shops in these
environment is going to impose on states.
the industry. The marketing effort Government banned the import of
would be now focused on logistics, tallow, a soap making raw material
communications, economy of (which was requiring a very little
operation, extra-ingredient processing to make soap). It then
innovations and of course pricing. followed an incidence of adulteration
of vanaspati by unscrupulous
manufacture.
India spends a very small proportion
of its GDP on healthcare ( A mere
1% ). This has stunted the demand
and therefore the growth of the
industry.An Indian would visit a
doctor only when there is an
emergency. This has led to a
mushrooming of unqualified doctors
and spread of non-standardized
medication.The incidence of Taxes
are very high. There is Excise Duty (
State & Central), Custom Duty,
Service Tax, Profession Tax, License
Fees, Royalty, Pollution Clearance
Tax, Hazardous substance (Storage
& Handling) license, income tax,
Stamp Duty and a host of other
levies and charges to be paid. On
an average it amounts to no less
than 40-45% of the costs.
Soaps in India cost very high in India
as compared to other countries like
Indonesia. E.g. 100 gms of soap in
Indonesia costs rs.4.25 whereas in
India it costs rs.10 approximately.
This is primarily attributed to the
high cost of imports due to high
import duties. Since India is now a
WTO member India will have to
bring down the import duty rates to
as much as 20% from 35%. Also the
excise rate at 16% forms formidable
portion of the cost. The Indian
players are lobbying with the
government agencies to reduce this
duty which can bring down the cost
of the final product. For toilet soap,
the average expenditure per user
household for low-income
households is Rs. 237, while it is Rs.
706 for high-income groups.

Poverty and associated malnutrition
dramatically exacerbate the
incidence of Malaria and TB,
preventable diseases that continue
to play havoc in India decades after
they were eradicated in other
countries.Poor Sanitation and
polluted water sources prematurely
end the life of about 1 million
children under the age of five every
year.In India people prefer using
household treatments handed down
for generations for common
ailments.Large joint families
transmit communicable diseases
amongst the members
The social factor is very important
when it comes to Premium soaps
segment of the soap market. With
the rising education and disposable
income levels, the need for hygiene
and personal / skin care becomes
important. Premium soaps are thus
targeted at the audience to change
their habits by raising their
aspiration levels.
Lack of good hygiene factor like
availability of clear water for bathing
purpose also discourages extensive
use of premium soaps by vast
population. Fragmented approach of
govt. and NGO’s towards inefficient
PHC-primary health center also
aggravates the problem. Investment
in basic sanitation will make biggest
improvement to health and also to
the soap market.
The growing reach of advertising
medias like satellite and cable TV
too is expected to give a boost to
the market penetration initiatives of
the industry players.
 The industry though capital
intensive is not very technology
intensive. Premium soap
manufacturing though compared
with other soaps manufacturing
relies to an extent on technology
(especially in the finishing stage).
The more important is logistics
management where marketing and
distribution play a pivotal role. Here
technology like (SCM) Supply Chain
Management and (E-CRM) Electronic
Customer Relationship Management
will play a pivotal role. Companies
like HLL are working very hard
towards such a system to rope up
Advanced automated machines the entire small stores and retailers
have increased the output and (Kirana Stores).
reduced the cost.Computerization The results of a survey done by
has increased the efficiency of the National Council of Applied Research
Pharma Industry.Newer medication, (NCAER) suggest that Indian FMCG
molecules and active ingredients space is all set to enter a new
are being discovered. As of January growth phase, sample this: the
2005, the Government of India has study says that the lower income
more than 10,000 substances for group is expected to shrink from
patenting.Advances in Bio- over 60 percent (1996) to 20 per
technology, Stem-cell research have cent by 2007 and the higher income
given India a step forward group is expected to rise by more
than 100 per cent. It looks; the
industry is all set for a fast-paced
race ahead.
There exist high exit barriers in the
industry due to high capital
investment.There are companies
like Marico, Kopran, and Anchor to
launch soaps in the premium
category. Oriflamme has entered
the market recently with premium
soap for the niche segment Milk &
Honey (40 Rs 100 Gms) and Kopran
has titled its new offering Shine &
Smile.
The new entrants generally cater to
small markets for e.g. there are a
large number of soap manufacturers
catering the local markets of
southern states. Most of these
players are a part of the large
unorganized sector, which directly
purchases fatty acids of palm oil
from the Indian manufacturers.

To a large extent, Premium Soap is a

price sensitive market. Off late there
has been an increasing trend
towards downtrading. And this has
forced the manufacturers to lower
the prices or offer temporary
discounts to woo the consumers who
are either downtrading from the
popular segment or graduating
upwards from carbolic soaps.
This sector faces low level of brand
loyalty. Switching costs is very low
and these results in price war and
people are concentrating on value-
for-money. This forces a lot of
players to go for frequent
promotional schemes like 3-on-1, 2-
on-1.
The major input for the soap
manufacture is vegetable oil (around
80% of the raw materials). Earlier
Animal Fat was used which was
even cheaper, but after the Indian
government banning animal fat, one
had to shift to vegetable oils. They
are not available in India and thus
have to be imported from countries
like Malaysia, Indonesia and China.
There are only few players who
export palm oil from these countries
and as such these exporters have a
commanding position.
There are various grades of palm oil
available and the manufacturer can
switch between these grades to
save on the cost of inputs. Besides,
soap can be manufactured either
from fatty acids or directly from the
oil.

Generally one can point at two

general broad substitute threats in
the Premium soap category. One
threat is from the use of products
like body wash and face wash.
Though the use of these products
forms a very small part of
consumption this is basically due to
the high costs associated with such
products. One can see in the some
developed countries which have
already registered a cent percent
penetration, the consumption of
soap has now decreased due to the
customers upgrading to Body wash
and Face wash.
The second threat is from
downtrading i.e. the consumers from
the premium category opting for the
popular category soap. Any small
change in the price of the Premium
soap can cause in the shift of the
price conscious consumer to opt for
shifting to a soap in the Popular
category. Most companies like HLL,
Nirma cater to both the categories.
As India has a low per capita
consumption of soaps the growth in
this sector has been stagnant.
Penetration though on an average is
95%, consumption in our country, as
compared to other developed
countries is a bare minimal (In the
rural market, even though
penetration is high the frequency of
taking a bath with soap is one out of
5 occasions). Capacity utilization in
the industry varies from as low as
50% to 80%. The market is littered
over with several, leading national
and global brands and a large
number of small brands, which have
limited markets
HOTEL INDUSTRY
• An unstable political situation in
India made the foreign investor
cautious leading to both a slowdown
in foreign investment and business
travel. However, government is
trying its best to boost tourism in
India which will further boost hotel
industry.• With the limitations on
granting of visas by the External
Affairs Ministries & policies of the
embassies in granting visas &
maintaining relations has affected
the growth of hospitality industry
over the years
• When the economic conditions are
favorable, hotels enjoy high
occupancy rates. This gives them
the flexibility of increasing their
room rates. During the boom phase
most hotel companies operated at
very high occupancy rates, which
gave them the leeway of increasing
their room rates.
• Foreign Direct Investment (FDI) is
entering Indian shores and foreign
institutional investors (FIIs) are
increasing their exposure to India.
All these positive signals spell more
business travelers and better times
for the hotel industry.
• The hotel industry is heavily taxed.
Expenditure tax, luxury tax and
sales tax inflate the hotel bill by
over 30%. Effective tax in the South
East Asian countries works out to
only 4-5%. As these taxes are the
domain of the state government, the
rates vary accordingly.
• Globally, leisure and
entertainment are seen to be
growing industries. Hence stable
socio-political and economic
conditions coupled with an
improvement in infrastructure
facilities (roads, airports etc) will
improvement the sentiments of the
tourists towards India.
• The hotel markets its business
with the help of the local festivals
and long trusted & cherished Indian
culture like Ayurveda in Kerala,
Beaches in Goa and traditional
melas.
• Consuming beef is considered as a
taboo for Hindus. Similarly, India
being the place of domicile for 24
crore Muslims ranking 2nd only to
Indonesia in the world is highly
influenced by the ‘Islamic’ culture
and Poke is considered as a taboo
for Muslims. But, Beef is a part of
the daily food for the foreign
tourists. Hence, the hotelier has to
cater the needs of various people
from both Occidental and Oriental
culture.
• Indian customers are highly price
sensitive. Many of them compare
service offered with price. There is
always a limitation on the part of the
hotelier to design the service within
the price constraints
• Technology has influenced not
only the basic product in the hotel
industry, but also the supplementary
services to a great extent. Right
from order taking to billing to
payment has been computerized
nowadays.
• Technology has revolutionalised
the booking system in hotels. One of
the major source of booking is
Global Distribution System (GDS)
where the travel operator can book
for various hotels though it. Also,
hotels provide online booking
systems where the hotelier tries to
personalize the booking and
minimize the customer interaction.
• The hotel is now equipped with all
the modern facilities which adds to
the service offering. System
allocation is the key to any hotels
success. The frontline service
provider should be able to satisfy
customer’s demands.
• Eg:- Hotels provide LCD, Laptop
& conference facilities.
WAT ALL TO DEVELOP

1. ENVIRONMENTAL FACTORS
2. 5 FORCES ANALYSIS PORTER
3. EFE MATRIX
4. IFM
5. SWOT
6. ANALYSISNG SWOT
7. SPACE AND ALL MATRIX

CURRENTLY
ENVIRONMENTAL
5 FORCES
EFE MATRIX
FIRMS IBM

Breakthrough microprocessor architecture that

VISION puts broadband communications right on the
chip

MISSION At IBM, we strive to operate in the invention,

development and manufacture of the industry's
most advanced information technologies,
including computer systems, software, storage
systems and microelectronics
ENVIRONMENT

In general international operations are highly

influenced by the governmental policies and
their laws, but In this case there is little effect
POLITICAL because most of countries are looking for
developments and new technologies. - Heavy
taxes in some countries make IBM increase its
products price

ECONOMIC

National growth rates

SOCIAL
Positive customers' perception toward new
technology around the world. Increase in
population and internet users.
Advanced technology development.
- Internet
TECHNOLOGY
- Increase numbers of companies that need
ERP systems
Cyber protection and the chemical that is used
in making hardware; like carbon, germanium,
LEGAL and silicon. Legal registration for their business
outsourcing facilities

PORTER'S 5
FORCES
BARRIERS TO
ENTRY

The threat of entry is low because the costs of

R&D, support products and services,
manufacturing, and distribution are very high

BUYERS
BARGAINING
POWER The power of buyers is high because the
switching costs for buyers are low; there are
also many product choices for the buyers.
There are two biggest processor suppliers in
the world who have very strong power on the
SUPPLIERS chip supplying.
BARGAINING However, the power of supplier for other low
POWER required materials and parts is lower than the
main suppliers

SUBSTITUTES

The web hosting business of other companies

and some advanced devices and computers
could cause threat of substitutes

RIVALRY
The strength of competition in this industry is
very high; the main rivals are HP, Microsoft,
Dell, and Fujitsu Siemens Computers, they
compete with international, national, regional,
and local
COCA COLA

To maintain our reputation as the leading cola

company in the world.

Everything we do is inspired by our enduring

mission:
• To Refresh the World... in body, mind, and
spirit.
• To Inspire Moments of Optimism... through
our brands and our actions.
• To Create Value and Make a Difference...
everywhere we engage

Like most companies, Coca-Cola is monitoring

the policies and regulations set by the
government. There are no political issues in
this instance.

There is low growth in the market for

carbonated drinks, especially in Coca-Cola’s
main market, North America.
There are changes in consumers’ lifestyles.
Consumers are more health conscious. This
affects the Coca-Cola’s sales of the carbonated
drinks as consumers prefer non-carbonated
drinks such as tea, juices and bottled drinks.
Demand for carbonated drinks decreases and
this leads to a decrease in Coca-Cola’s
revenues

As the technology advances, new products are

introduced into the market.
The several factors that make it very difficult
for the competition to enter the soft drink
market include:• Bottling Network: Both Coke
and PepsiCo have franchisee agreements with
their existing bottler’s who have rights in a
certain geographic area in perpetuity. These
agreements prohibit bottler’s from taking on
new competing brands for similar products.
Also with the recent consolidation among the
bottler’s and the backward integration with
both Coke and Pepsi buying significant percent
of bottling companies, it is very difficult for a
firm entering to find bottler’s willing to
distribute their product.ad spend;brand
image;retailer shelf space;
The major channels for the Soft Drink industry
are food stores, Fast food fountain, vending,
convenience stores and others in the order of
market share. The profitability in each of these
segments clearly illustrate the buyer power and
how different buyers pay different prices based
on their power to negotiate
Commodity Ingredients: Most of the raw
materials needed to produce concentrate are
basic commodities like Color, flavor, caffeine or
additives, sugar, packaging. Essentially these
are basic commodities. The producers of these
products have no power over the pricing hence
the suppliers in this industry are weak
Large numbers of substitutes like water, beer,
coffee, juices etc are available to the end
consumers but this countered by concentrate
providers by huge advertising, brand equity,
and making their product easily available for
consumers, which most substitutes cannot
match. Also soft drink companies diversify
business by offering substitutes themselves to
shield themselves from competition.
The Concentrate Producer industry can be
classified as a Duopoly with Pepsi and Coke as
the firms competing. The market share of the
rest of the competition is too small to cause
any upheaval of pricing or industry structure.
Pepsi and Coke mainly over the years
competed on differentiation and advertising
rather than on pricing except for a period in the
1990’s. This prevented a huge dent in profits.
Pricing wars are however a feature in their
international expansion strategies
WALMART

To put all small business owners out of business and

give everyone no choice but to buy cheap imported
goods from their stores (which they want to be the
only shopping choice you have).

To give ordinary folk the chance to buy the same

thing as rich people

The political influences in this industry is probably

the most burning concern with organizations going
global and many countries restricting the growth of
companies by many countries. FDI in many countries
are still heavily regulated and global companies are
yet to set foot into emerging markets like India.
The recent financial crisis has had a negative impact
on consumer spending and outlook.
Disproportionate levels of income and consumer
spending in developing countries like India
and China will impact growth of global companies.
Exchange rates affect global sourcing and
pricing policies on a day to day basis.
Developing countries are not used to push type
marketing and aggressive selling. Bulk buying
patterns predominantly present in USA, is non-
existent in Asian countries. Language and
cultural factors is a barrier to globalization. Anti-
Globalization movements in the recent past
has affected growth of global companies, especially
companies originated USA.

Development in technology and satellite systems

has given a boost to Wal-Mart. Success is value
chain of walmart
low to medium-high investments costs;extensive
investment in IT;distribution network;sale and scope
of opertaions is high;regulatory concerns

it is the only store in many locations isolating

competitions and limiting consumers choice;
attractive and probably the best pricing so low
power

suppliers have lost power over pricing and other

terms due to walmart's size;wal mart is key
customer to most of the suppliers and therefore they
depend on it; walmart in aggressive selling

low to medium- department stores charge higher

prices;walmart has all types of formats serving all
types of customers;

pricing wars has reduced margins from 6 to 1 %