Best Case Solution: NOVOZYMES CRACKING THE EMERGING MARKETS

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NOVOZYMES CRACKING THE EMERGING MARKETS
Case Study Analysis Solutions
PORTER FIVE FORCES:
THREAT OF NEW ENTRANTS:
The threat of new entrants for the business is high as there are no significant barriers of entry in the industry and the markets of the country. However, the local threat is much greater than the international one as the government of the country has adopted policies and regulations that favor the local entities.
THREAT OF SUBSTITUTES:
The threat of substitutes is moderate or low for the management of the company as there is no significant and effective substitute of the enzymes in the world currently. Although the chemicals are a form of substitute of the enzymes however, their ineffectiveness and side effects are greater than the enzymes.
COMPETITIVE RIVALRY:
The threat of competitors and competitive rivalry is high in the Chinese market and the indus
novozymes Cracking the emerging markets case solution
try as there are several entities that are directly competing with the company in both the segments of the industry the premium end and the commodity end of the industry. In the premium end, the management of the company is majorly competing with the western organizations and in the lower end it is competing with the local companies of the country.
BARGAINING POWER OF BUYERS:
The bargaining power of the company is also increasingly becoming low as the local companies are directly competing with the low price strategy and they have also successfully penetrated the high-end market of the industry. This has increased the bargaining power of buyers in the industry.
BARGAINING POWER OF SUPPLIERS:
Due to the magnitude of the business, the bargaining power of suppliers is low for the management of the company.
COMPETITOR ANALYSIS:
The competitor analysis of the organization is competing with multiple rivals in two different industry segments and the top four companies are responsible for holding roughly 25% of the market. There are several small sized and mid sized entities that are operating on a small scale in the country and they are accounted for roughly 50% of the market share of the industry. This market share of these companies is segregated in both the segments of the industry.
The premium end rivals of the company majorly compete on the basis of research and development of their products and innovation in it. For this reason they constantly spend funds and resources to develop new and more effective products for the detergents and food companies that require best possible products to increase their effectiveness and reduce their costs in terms of the usage of raw materials.
However, the competition in the other segment is quite the opposite of the premium segment of the industry as the main focus of the companies is to offer products to the textile and brewing companies at lower prices, even with a compromised quality. This is achieved through massive sales force of these companies rather than the research and development team.
POSSIBLE SOLUTIONS:
ā€¢ How should Novozymes relate to local competitors? By competing on technological innovation only in high-margin verticals?
The study and research of the market is necessary before reaching to the decision for feasible strategy in the high-margins verticals of the industry. The historical performance of the organization in this segment of the industry has been phenomenal over the years and this is clearly indicated by the market share of the organization that it currently sustains in this sector. However, the environment and success factor of any organization do not remain constant at all and it is necessary that the management of the organization regularly studies and analyzes the customer preferences and the market trends of the region where it has interests and operates……………..
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