Fireworks Industry Case Study
Although Liuyang was the most famous place for making fireworks in China, some other cities grew up. For example, Liling, Pingxiang, and Wanzai were fierce in price and quality, while Dongguan took advantage of its location to compete in export market. Moreover, most of fireworks factories were owned either by villages or families. They were flexible and quick in responding to market demand and they did not entail much administrative cost. They also neglected intellectual property protection and would copy any popular design. These two factors led to a lower selling price. For the foreign competition, products made in Japan and Korea were superior in quality. When facing stringent regulation of exporting fireworks, China-made fireworks had a lower reputation in quality control. Furthermore, many foreign manufacturers outsourced manufacturing activities to China. As a result, Chinese fireworks were risking losing brand identities.
The Threats of New …show more content…
He should also invest in high technology equipment and R&D to catch up with or exceed the performance of competitor’s products. Moreover, he should hire skilled factory workers and launch training programs to make them fit the innovation of products. As to the business strategy, Jerry could focus on improving products differentiation. Due to the low labor costs and raw material costs, competing on cost will lead to a low profit margin. He can upgrade packaging or visual effects of fireworks. Meanwhile, he should attach more importance to quality control and timing control in order to rebuild reputation in global market. As to the corporate strategy, Jerry could ask government to impose penalties on plagiarism to protect brand names and intellectual properties. Furthermore, he can plan to expand foreign markets, especially European market because European countries have large consumption of fireworks (see Exhibit 2) and they have less stringent standards of importing