European Consumer Electronics Industry - Five Forces Analysis

Chapter 6       THE CONSUMER ELECTRONICS INDUSTRY

Introduction

In this chapter the European consumer electronics industry will be analyzed and described. First, there will be described which segments are encompassed by this industry and which segments will be analyzed extensively in this paper. Next, a general description of these segments will be provided, including examples of products, trends and an international comparison. Afterwards, the competitive structure of these segments will be analyzed. Therefore the Five Forces model of Porter will be used, which first will be outlined, before being applied to the industry. Then, three other issues the industry has to deal with will be described: the environment, regulations and the role of technology. Finally, an outlook for the future will be given.

 6.1 Segment definition

In this paper the term consumer electronics industry is used for the industry which produces electronical equipment for private consumers. Within this industry several segments can be distinguished. First there is the 'traditional' consumer electronicssegment: the audio and video equipment segment. Second there is a segment which will be called household or domestic appliances, in which products generally intended for domestic use, like vacuum cleaners, washing machines, ventilators and irons, etc. are placed. The third segment will be called personal care, with products like shavers, hair dryers and electrical toothbrushes.

Because of the convergence of the telecommunication and photographic equipment industries with the consumer electronics industry these segments could also be included in the industry. However, they will not be described in this paper since these are relative small segments in which private consumers account for only a small part.

Because the domestic appliances and the personal care segments have much in common in terms of market characteristics they will be described together. Of course, some important differences will...