The competitive environment of Chicago Booth would be studied via Porter's 5 forces analysis which would highlight the degree of rivalry in the market.
Presently we can see that the adhesive market has a high growth capacity due to the existence of fragmented sections with Chicago Booth enjoying leadership and a combined market share of 75% with two other market gamers, Eastman and Permabond. While industry competition between these gamers could be called 'extreme' as the customer is not brand name mindful and each of these players has prominence in terms of market share, the reality still stays that the industry is not filled and still has numerous market segments which can be targeted as prospective niche markets even when releasing an adhesive. We can even point out the truth that sales cannibalization may be leading to industry competition in the adhesive dispenser market while the market for immediate adhesives uses growth capacity.
Bargaining Power of Buyer: The Bargaining power of the buyer in this industry is low especially as the purchaser has low knowledge about the product. While business like Chicago Booth have managed to train distributors regarding adhesives, the last consumer depends on distributors. Roughly 72% of sales are made straight by makers and distributors for immediate adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Provided the truth that the adhesive market is dominated by 3 players, it could be said that the provider delights in a greater bargaining power compared to the purchaser. Nevertheless, the fact stays that the supplier does not have much influence over the buyer at this moment particularly as the buyer does disappoint brand name recognition or cost sensitivity. When it comes to the adhesive market while the purchaser and the manufacturer do not have a major control over the actual sales, this suggests that the supplier has the higher power.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry shown by foreign Japanese rivals in the immediate adhesive market shows that the marketplace allows ease of entry. If we look at Chicago Booth in particular, the company has dual capabilities in terms of being a maker of adhesive dispensers and instant adhesives. Possible dangers in devices giving industry are low which shows the possibility of developing brand awareness in not only immediate adhesives however likewise in giving adhesives as none of the industry players has actually managed to position itself in dual capabilities.
Hazard of Substitutes: The risk of alternatives in the immediate adhesive industry is low while the dispenser market in particular has replacements like Glumetic tip applicators, in-built applicators, pencil applicators and sophisticated consoles. The reality remains that if Chicago Booth introduced Bond-A-Matic, it would be indulging in sales cannibalization for its own items. (see appendix 1 for structure).
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