The organization in focus for this assignment is “Mastercard Incorporated” (MasterCard hereafter), the financial services and global payments company. You should focus on the core business of MasterCard, i.e. debit and credit cardsDescription
Please note that all the materials added will help you with the question. especially the market sample assignment also find attached the slides for the coursework pls1. Critically define and assess the business microenvironment (industry) of Bulgari, i.e., the
jewellery and luxury watch industry: use the Porter’s Five Forces Framework to clearly
indicate and analyse the main industry players. Evaluate the strength of each Force.
The jewellery and Luxury watch industry on a global platform, is huge and there are luxury
brands contributing to this industry such as Bulgari, Chopard, Piaget, Chanel and many others
(Merlo, 2018). The microenvironment of Bulgari can be analysed with the help of the Five
Forces Model.
Threat of New Entrants
The threat of new entrants in this industry can be considered as low as there are several barriers
to entry in this industry. The first barrier is the brand loyalty of the consumers. There are
premium brands in this industry and these brands have established their customer loyalty.
Since, customers, for their luxury purchases, are often obsessed by the brand, new entrants will
encounter difficulties in attracting consumers (Chailan, 2018). Brands such as Chopard and
Bulgari has extremely loyal customers. Further, the investment in this industry is also very high
as this is a business of luxury accessories. Building up the supply chain is also a complex
process in this industry as suppliers do not desire to contract with new businesses and it
becomes difficult to compete with the existing brands. In addition, the existing brands are a pat
of large groups or are giant companies in themselves, this makes the industry a difficult place
to establish a new company(Merlo, 2018).
The main strengths of new entrants are:
They bring about a newness and innovation.
New entrants compel the other companies to innovate and improve quality.
New entrants may bring about new services and something different from the rest of
the industry (Atwal and Bryson, 2017).
Threat of Substitutes
The threat of substitutes in this industry is moderate. The brands which have already established
their loyal customers usually do not have a threat of substitution from the other established
brands. However, there are certain mid- range brands which attempt to offer customers with
similar designs of the renowned luxury companies such as Chopard, Bulgari or Piaget, at much
lower prices (Theurillat and Donze, 2017). These companies often attract customers due to
their lower prices and similar or copied designs. These brands often serious threat to the
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established brands within this industry. These medium ranged brands often locate their outlets
at some distance from the established brands like Chopard and Bulgari. This makes it easier
for them to attract customers to their store (Merlo, 2018).
The main strengths of substitutes are:
The substitutes usually use the pricing strategy as their strength to attract customers.
Substitutes are similar products sold at cheaper prices.
The availability of substitutes encourage innovation and helps the brands to improve
their quality of products and services (Chailan, 2018).
Competitive Rivalry
In this industry, the competition is extremely high as the players in this industry are all highend
brands. There are a handful brands that dominate the entire industry such as Chopard,
Bulgari and such others (Donzé and Fujioka, 2017). These brands are the established and the
most popular brands of this industry. These dominating brands have strong brand images as
the brands are generally endorsed by celebrities and different inspirational personalities.
The existing competition within an industry,
Encourages brands to improve
There is an improvement in pricing strategies and product quality (Donzé and Fujioka,
2017).
Bargaining power of buyers
The bargaining power of buyers in this industry is low as the consumers prefer high end
products from the premium or rather luxury brands and they purchase these products at
whatever prices they are sold. This low bargaining power of customers has resulted from their
extreme loyalty and emotional attachment to the brand as well as the exclusive products that
the brands offer (Atwal and Bryson, 2017). The brands offer the customers with unique
collection and this furthermore, lowers the bargaining power of customers. For instance,
Bulgari offered the collection of jewellery that belonged to Elizabeth Taylor.
The main strengths here are:
The bargaining power of buyers can bring about a change in the pricing strategy
It can also trigger brands to offer new product lines (Atwal and Bryson, 2017).
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Bargaining power of suppliers
The bargaining power of suppliers in this industry is moderate to high. This is because the
exclusive suppliers of luxury brands like Bulgari are highly skilled and they cannot be just
replaced. Here, the bargaining power of suppliers remain high as the suppliers provide the
brands with high quality work and companies like Bulgari do not compromise on style and
quality of their jewellery or any other accessories. The suppliers also supply the brands with
exclusive quality such as the ‘b.zero collection of Bulgari’ (Donzé and Fujioka, 2017). The
exclusive suppliers act as the competitive advantage of the company and hence this makes their
bargaining power higher.
The main strengths of the bargaining power of suppliers are;
They can make changes in price as their demand by the brands are higher.
The suppliers can improve the quality of products (Jedidi and Heil, 2019)
2. What is the competitive advantage of Bulgari? What are the main sources of this
advantage? Explain the reasons for the relevance of these sources.
Bulgari, being one of the most popular and established brands in the industry of luxury watches
and jewellery, has many competitive advantages. The main competitive advantage of Bulgari
revolves around the use of unique design and the strategy or technique that the organisation
implements. Bulgari is one such company that has a competitive advantage around a unique
design and its exclusivity is one of its competitive advantages (Hoffman and Coste- Manière,
2016). Along with the designs and exclusivity of the brand another competitive advantage of
the brand is the technique or strategy used for the different lines of the products. For instance,
Bulgari, in the year 2012, launched the first collection of Serpenti Bags which had become
hugely popular among the customers. These bags had a unique design for which it had become
popular. Here, the brand used the strategy of designing the snake head in the bag so prominently