The paper "Overview of the Canadian Jewelry Retail Sales Industry" is an outstanding example of a marketing case study. Canada is one of the countries in the world with the highest jewelry acquisition in the world. The jewelry market in Canada can be divided into two retail categories: costume jewelry (precious metals and gems) and fine jewelry. Since the year 2005, the Canadian jewelry retail market has exceeded projected growth expectations to become one of the fastest-growing markets in the country (Industry Canada, 2012). Projections indicate that the industry is likely to grow profitably in the next few years.
Future trends in the jewelry market will include special engagement bangles, cocktail rings, and cuffs. Other trends that will be witnessed include jewelry pieces with an exotic and ethnic feel. Innovations in geometric designs will be a driving factor that will help incorporate various design models to keep pace with changes in market trends. Electronic commerce has of late become also be an important force in the Canadian jewellery industry. According to (Gillian & Davidson, 2000), about 15% of Canadians consumers prefer making their purchases online because this option gives them the opportunity to compare prices while twenty percent prefer to purchase the stuff from supermarkets. Environmental Analysis PEST Analysis Political NAFTA (North American Free Trade) allows easy trade among neighboring countries. The Canadian government supports funding for small businesses in Canada. Favorable trade tariffs and taxes are applied to jewelry products, both imported and exported. Economic Banking institutions avoid lending money to small businesses due to high risks of failing. Currency fluctuations discourage companies to explore foreign markets. Different provincial or state taxes are applied to some products such as jewelries. Social Fashion trends are always changing to keep up with new fashions desired by consumers. Different social classes have different buying needs based on quality and price.
Upper and high-income families tend to associate with style and quality in products. Changes in fashion trends arise quickly, requiring rapid reaction by companies to fill the gaps. Young adults in the age group 18-35 years provide the most demanding market for jewelry products. Technological New technologies provide opportunities for more products to be manufactured and delivered within a short period of time. Patents held against certain products and processes allow companies to have exclusive rights. Trademarks on brand names are being secured by companies within the jewelry industry. Porter’ s Five Forces Analysis of the Canadian Jewelry Industry The threat of New Entrants The threat of new market entrants is very high due to the low start-up costs.
In addition, the switching costs for customers are relatively low because of a lack of product differentiation. Bargaining Power of Suppliers Independent jewellery retail stores have very low bargaining power with their suppliers due to the inability to purchase large quantities of products. Early payment and volume discounts are not given to small retailers, hence low bargaining power.
Chain stores have high bargaining power with the suppliers due to their high purchasing power. Bargaining Power of Buyers The bargaining power of buyers in small retail stores is quite low due to lack of supplier discounts and high mark-ups. The bargaining power of customers in departmental stores is relatively high because of the high discounts received from the suppliers, which enables departmental stores to sell products at cheaper prices.
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