Environmental Analysis
External Environment
Chinese Market
- still socialist economy
?» huge gap between the stated plans and the actual ability of government to manage and control the economy
?» tremendous amount of economic interaction took place outside the government¡¦s formal economic plan
- many smugglings and piracies
- regional blockades
- over-employment problem
Chinese color TV Market
- full production capacity in demand
?» principal battleground
- high competition
?» Japanese firms: high-end market. Increasing production bases
?» Domestic Firms: low-end market. But they were less competitive in large screen TV.
- small color TV market was shrinking
?» large market size of these product lines facilitated the fast achievement of cost reduction(economy of the scale, learning effect)
Consumer analysis
- only 41% of households had color TV
?» 80% of urban, 28% of rural
?» Low-end market is not a viable long-term. But overall market was still expanding.
- Buying power: expanding both high-ends and low-ends
- Tendency that first image of a product lasted long in the eyes of the consumer.
?» the reason for differentiation needed focusing on high-ends
- consumer preference
?» Urban- brand name, functionality were important factors.
?» Rural- reasonable quality and low price were preferred. ...