Question

What are the competition faced by Jewelry industry in Canada

1- List them

2-Choose your top 3

3-Describe them

4-Analyze them

Where do you fit in the Competitive landscape in Canadian market

Answer 1

1- Competition in terms of excessive fragmentation. Excessive reliance on foreign imports. High local cost vs. low of cost of finished chinese imports reducing the chances for profitability as the local products will have to be sold at a lower rate which will decline the profitability of the firms which are already highly fragmented.

2- Top 3 are high fragmentation, cheap imports and low profitability.

3. Excessive fragmentation means there are more number of firms, each holding limited share in the overall market. Although there are some big brands, the segment is highly less concentrated.

Cheap imports from China crowd in the local landscape, coercing the global players to reduce the mark up and sell the manufactured jewellery at a cheaper rate.

All this leads to low profitability and less chances to gain economies of scale as local taxes and demand prove it increasingly difficult to increase the scope of sales at a higher price.

4. Thus excessive fragmentation could lead to higher competitiveness, wherein more number of firms continue to hold a smaller share in the market and no monopolistic price discrimination taking place.

Cheap imports leads to higher competition and reduces the ability of the local producers to sell with respect to price. They have to inculcate some other characteristics such as higher quality and refinement in order to justify the higher price.

Lower profitability leads to less research and development in improving the scale and quality of the business. Thereby reducing the scope for future growth.

As a consumer I will fit in the canadian market by buying products which are cheap and a good bargain. Whereas if I am a firm then I will have to increase the market share by selling goods at a competitive price.