Industry Analysis

Question 2:

The five Porter’s competitive forces are: rivalry among competitors, threat of new entrants, threat of substitutes, power of suppliers, and power of buyers. The strongest forces among the five competitive forces in the carpets and flooring industry are the thread of substitutes and the thread of new entrants. The thread of substitutes is significant because the cost of switching carpet and flooring suppliers is low and the ability for customers to change a brand is easy. The relatively simple technology needed in carpet and flooring products’ manufacturing process, the increasing buyer demand and the easy access of distribution channels lead to the strong threat of new entrants.

The power of buyers are influential to carpet and flooring industry in some extent but the power is moderated by the growing demand of buyers and the requirement of a strong brand reputation as well as the high installing-service quality. The power of suppliers and rivalry among competitors are regarded as the relatively weak forces in the carpet and flooring industry.

Question 6:

Determining the key success factors of an industry helps companies to meet the demands of its customers and maintain a strong position in the market. The key success factors of the carpet and flooring industry are: a breadth of product categories and selection for different customer segments, good customer service including product merchandising, installation offer and repair service, good promoting advertisements to highlight new features of products, appropriate inventory control and convenient distribution channel.

Question 7

With low entry barriers, growing customer carpet and flooring decoration demand and the stability of residential real estate construction, the carpet and flooring industry is attractive and feasible.