Industry Analysis for Backpack in Canada
Backpack is included in the baggage industry, which is increasingly growing industry in the world. Industry Analysis for Backpack can be carried out by PEST analysis, which represents Political factors, economic factors, social factors, and technological factors, and by Porter’s Five Forces, which are competitive rivalry, bargaining power of buyers, bargaining power of suppliers, threat of substitute, and threat of New Entrants (Aghazadeh). There are organized and unorganized segments in luggage market of Canada.
PEST Analysis
Political and Legal Factors
The political and legal factors that exert their impact on the luggage industry in Canada are stability of the political processes, political system towards the luggage industry. Further, approaches of government towards foreign investment, and rules and regulations adopted by government exert their influence on the luggage industry where Backpack is conducting its business. Further, government allows importing of raw material providing an ease for the company to perform its operations (Saleem).
Economic Factors
The luggage industry increases with the increase in tourism industry, and its performance is highly dependent on leisure activities and type and level of business (Nagel). Further, the rate of economic growth, market size for product of companies, cost of funds , sources of funds, and cost on Research and Development are all exerting their impact on luggage industry of Canada.
Social Factors
Attitude and behavior of local people for products, consumer acceptability of the innovative products, consumption pattern and lifestyle of people, and level of education of local population affect the operations of Backpack Canada in the industry. However, sale of luggage increases during occasions of marriage, festive seasons, and vacations. Backpack is positioning itself in the industry as status for tourists and consumers.
Technological Factors
The luggage industry is affected by new innovation in the design of products, level of education and training regarding technology, and rate of change of technology. The luggage industry is, however analyzing shifts such as from suitcases that are made of tin, plywood suitcases, to the suitcases that are made from technologically molded plastic. Backpack is also emphasizing on adoption of new trends in order to meet emerging demands and needs of customers. The companies operating in the luggage industry are taking convenience, comfort, and aesthetics into consideration for ensuring delivery of quality products to the customers. The customers are, however, facilitated with several features such as handle, wheels, combination locks, and use of light weight materials for bags. Companies in luggage industry of Canada are spending on technology for ensuring innovative and best product for the customers.
Porter Five Forces Analysis
Competitive Rivalry
Competitive rivalry in luggage industry of Canada is high because of growth of moulded luggage and soft luggage, and also because there is lack of switching cost.
Bargaining Power of Buyers
The bargaining power of buyers is medium in the industry as the base of targeted customers is huge, and there are many players in the organized market segment.
Bargaining Power of Suppliers
Bargaining power of suppliers is medium as substitute raw material is hardly available, and material can also be imported.
Threat of Substitute
The threat of substitute is medium is medium in the industry because substitutes are available.
Threat of New Entrants
The threat of new entrants is low because of existence of entry barriers such as huge investment is required by new entrants, and existing players have their brand awareness.
References
Aghazadeh, Hashem. Principles of Marketology. Basingstoke: Palgrave Macmillan, 2016
Nagle, Garrett. Tourism, Leisure and Recreation. Canada: Nelson Education Limited, 1999.
Saleem, Shaikh. Business Environment. New Delhi: Pearson Education, 2006
