Bose and Industry Analysis of China

Bose and Industry Analysis of China

Introduction

China has the biggest industry of audio product manufacturers in the world. When compared with other industries of the world, China has the advantages of low processing cost and cheap labor force (Anker, 2008). This has been the main reason why various foreign companies have moved their production lines to china. With rising demand for cheap products and incomes on the market, domestic demand has also risen and industry revenues are expected to increase in future years. This paper aims to conduct a thorough analysis of the Chinese audio equipment manufacturing industry, specifically focusing on the sale of audio equipment (Bose) in China (Anker, 2008).

Key Success Factors

Key success factors are important to the long-term success of the industry. The main factors that determine success include resources, product attributes, competencies, competitive capabilities, and market achievements (Baker, 2008). Although the key success factor for audio manufacturing industries around the world is achieving economies of scale, companies naturally attain this capability in the Chinese market due to the abundance of cheap labor. All audio manufacturing companies in the industry are quality controlled as they know the importance of quality for customers (Baker, 2008). They all have skilled and cheap labor which is one of the most important success factors that has contributed towards the high productivity of the industry (Baker, 2008). However product design is one aspect that companies need to bear in mind since it can be very beneficial in providing them with a competitive advantage. Apart from this, a company needs to have the following critical success factors in order to be competitive (Baker, 2008; Katz et al., 1998):

Technology Leadership

Diversified product portfolio

Effective marketing strategies to attain greater market share

Strong distribution network

Brand recognition among customers

Efficient research and development

Customer loyalty

The key success factors mentioned above are essential for a company if it wants to gain a competitive advantage (Coyne, K.P. and Sujit B. (2006). For example, a company that is a leader in technology will have a more efficient research and development unit which will innovate and come up with novel and exciting technologies, helping it to widen its competitive moat in the industry. Apart from this, a diversified product portfolio means that the risk of failure will be reduced since the company will put its eggs in many baskets rather than just one. There is also a pressing need to develop extensive marketing strategies that are able to effectively identify leading market trends and consumer preferences.

The Driving Forces

The biggest change in the industry is caused by the so-called drivers of the industry. Driving forces of Chinese audio manufacturing industry have evolved with the increase in globalization, long-term growth, and changes in cost efficiency. The driving forces that can be identified in the industry are:

Technological change

Shifting consumer preferences

Changing market trends

All these factors combined are leading China to take a bigger share of the market. By keeping their prices very low, they are forcing their competitors to cut prices to increase production (Liu et ...