SWOT Analysis Amazon

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SWOT Analysis Amazon

Amazon is a profitable organization. In 2005 profits for the three months to June dipped
32% to $52m (£29.9m) from $76m in the same period in 2004. Sales jumped 26% to
$1.75bn. Until recent years Amazon was experiencing large losses,
due to its huge
initial set up costs. The recent dip is due to promotions that have offered reduced
delivery costs to consumers. This SWOT analysis is about Amazon.

Strengths.



Amazon is a profitable organization. In 2005 profits for the three months to Jun
e
dipped 32% to $52m (£29.9m) from $76m in the same period in 2004. Sales
jumped 26% to $1.75bn. Until recent years Amazon was experiencing large
losses, due to its huge initial set up costs. The recent dip is due to promotions
that have offered reduced de
livery costs to consumers.



Customer Relationship Management (CRM) and Information Technology (IT)
support Amazon's business strategy. The company carefully records data on
customer buyer behaviour. This enables them to offer to an individual specific
item
s, or bundles of items, based upon preferences demonstrated through
purchases or items visited.



Amazon is a huge global brand. It is recognisable for two main reasons. It was
one of the original dotcoms, and over the last decade it has developed a
custome
r base of around 30 million people. It was an early exploiter of online
technologies for e
-
commerce, which made it one of the first online retailers. It has
built on nits early successes with books, and now has product categories that
include electronics,
toys and games, DIY and more.



Weaknesses.



As Amazon adds new categories to its business, it risks damaging its brand.
Amazon is the number one retailer for books. Toy
-
R
-
Us is the number one
retailers for toys and games. Imagine if Toys
-
R
-
Us began to sel
l books. This
would confuse its consumers and endanger its brands. In the same way, many of
the new categories, for example automotive, may prove to be too confusing for
customers.



The company may at some point need to reconsider its strategy of offering
free
shipping to customers. It is a fair strategy since one could visit a more local
retailer, and pay no costs. However, it is rumoured that shipping costs could be
up to $500m, and such a high figure would undoubtedly erode profits.

Opportunities.



The c
ompany is now increasingly cashing in on its credentials as an online retail
pioneer by selling its expertise to major store groups. For example, British retailer
Marks and Spencer announced a joint venture with Amazon to sell its products
and service onli
ne. Other recent collaborations have been with Target, Toys
-
R
-
Us and the NBA. Amazon's new Luxembourg
-
based division aims to provide
tailored services to retailers as a technology service provider in Europe.



There are also opportunities for Amazon to buil
d collaborations with the public
sector. For example the company announced a deal with the British Library,
London, in 2004. The benefit is that customers c an search for rare or antique
books. The library's catalogue of published works is now on the Amazo
n website,
meaning it has details of more than 2.5m books on the site.



In 2004 Amazon moved into the Chinese market, by buying china's biggest
online retailer, Joyo.com . The deal was reported to be worth around $75m
(£40m). Joyo.com has many similarities

to its new owner, in that it retails books,
movies, toys, and music at discounted prices.

Threats



All successful Internet businesses attract competition. Since Amazon sells the
same or similar products as high street retailers and other online businesses, it
may become more and more difficult to differentiate the brand from its
competitors. Amazon does

have it s brand. It also has a huge range of products.
Otherwise, price competition could damage the business.



International competitors may also intrude upon Amazon as it expands. Those
domestic (US
-
based) rivals unable to compete with Amazon in the US,

may
entrench overseas and compete with them on foreign fronts. Joint ventures,
strategic alliances and mergers could see Amazon losing its top position in some
markets.



The products that Amazon sells tend to be bought as gifts, especially at
Christmas. T
his means that there is an element of seasonality to the business.
However, by trading in overseas markets in different cultures such seasonality
may not be enduring.






SWOT Analysis
-

Tata Motors Limited

The company began in 1945 and has produced more

than 4 million vehicles. Tata
Motors Limited is the largest car producer in India. It manufactures commercial and
passenger vehicles, and employs in excess of 23,000 people. This SWOT analysis is
about Tata Motors.

Strengths



The internationalisation strat
egy so far has been to keep local managers in new
acquisitions, and to only transplant a couple of senior managers from India into
the new market. The benefit is that Tata has been able to exchange expertise.
For example after the Daewoo acquisition the In
dian company leaned work
discipline and how to get the final product 'right first time.'



The company has a strategy in place for the next stage of its expansion. Not only
is it focusing upon new products and acquisitions, but it also has a programme of
in
tensive management development in place in order to establish its leaders for
tomorrow.



The company has had a successful alliance with Italian mass producer Fiat since
2006. This has enhanced the product portfolio for Tata and Fiat in terms of
production
and knowledge exchange. For example, the Fiat Palio Style was
launched by Tata in 2007, and the companies have an agreement to build a pick
-
up targeted at Central and South America.




Weaknesses



The company's passenger car products are based upon 3rd and 4th generation
platforms, which put Tata Motors Limited at a disadvantage with competing car
manufacturers.



Despite buying the Jaguar and Land Rover brands (see opportunities below); Tat
has not
got a foothold in the luxury car segment in its domestic, Indian market. Is
the brand associated with commercial vehicles and low
-
cost passenger cars to
the extent that it has isolated itself from lucrative segments in a more aspiring
India?



One weakness
which is often not recognised is that in English the word 'tat'
means rubbish. Would the brand sensitive British consumer ever buy into such a
brand? Maybe not, but they would buy into Fiat, Jaguar and Land Rover (see
opportunities and strengths).

Opportu
nities



In the summer of 2008 Tata Motor's announced that it had successfully
purchased the Land Rover and Jaguar brands from Ford Motors for UK £2.3
million. Two of the World's luxury car brand have been added to its portfolio of
brands, and will undoubted
ly off the company the chance to market vehicles in
the luxury segments.



Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in
2004 for around USD $16 million.



Nano is the cheapest car in the World
-

retailing at little more than a m
otorbike.
Whilst the World is getting ready for greener alternatives to gas
-
guzzlers, is the
Nano the answer in terms of concept or brand? Incidentally, the new Land Rover
and Jaguar models will cost up to 85 times more than a standard Nano!



The new globa
l track platform is about to be launched from its Korean (previously
Daewoo) plant. Again, at a time when the World is looking for environmentally
friendly transport alternatives, is now the right time to move into this segment?
The answer to this question

(and the one above) is that new and emerging
industrial nations such as India, South Korea and China will have a thirst for low
-
cost passenger and commercial vehicles. These are the opportunities. However
the company has put in place a very proactive Corp
orate Social Responsibility
(CSR) committee to address potential strategies that will make is operations
more sustainable.



The range of Super Milo fuel efficient buses are powered by super
-
efficient, eco
-
friendly engines. The bus has optional organic clutch with booster assist and
better air intakes that will reduce fuel consumption by up to 10%.

Threats



Other competing car m
anufacturers have been in the passenger car business for
40, 50 or more years. Therefore Tata Motors Limited has to catch up in terms of
quality and lean production.



Sustainability and environmentalism could mean extra costs for this low
-
cost
producer. Th
is could impact its underpinning competitive advantage. Obviously,
as Tata globalises and buys into other brands this problem could be alleviated.



Since the company has focused upon the commercial and small vehicle
segments, it has left itself open to com
petition from overseas companies for the
emerging Indian luxury segments. For example ICICI bank and DaimlerChrysler
have invested in a new Pune
-
based plant which will build 5000 new Mercedes
-
Benz per annum. Other players developing luxury cars targeted at

the Indian
market include Ford, Honda and Toyota. In fact the entire Indian market has
become a target for other global competitors including Maruti Udyog, General
Motors, Ford and others.



Rising prices in the global economy could pose a threat to Tata M
otors Limited
on a couple of fronts. The price of steel and aluminium is increasing putting
pressure on the costs of production. Many of Tata's products run on Diesel fuel
which is becoming expensive globally and within its traditional home market.

SWOT A
nalysis Toyota

Strengths.



New investment by Toyota in factories in the US and China saw 2005 profits rise,
against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion
yen ($11bn; £5.85bn), while sales were 7.3% higher at 18.55 trillion yen.
Commentators argue

that this is because the company has the right mix of
products for the markets that it serves. This is an example of very focused
segmentation, targeting and positioning in a number of countries.



In 2003 Toyota knocked its rivals Ford into third spot, to

become the World's
second largest carmaker with 6.78 million units. The company is still behind rivals
General Motors with 8.59 million units in the same period. Its strong industry
position is based upon a number of factors including a diversified produc
t range,
highly targeted marketing and a commitment to lean manufacturing and quality.
The company makes a large range of vehicles for both private customers and
commercial organizations, from the small Yaris to large trucks. The company
uses marketing tec
hniques to identify and satisfy customer needs. Its brand is a
household name. The company also maximizes profit through efficient
manufacturing approaches (e.g. Total Quality Management).

Weaknesses



Being big has its own problems. The World market for car
s is in a condition of
over supply and so car manufacturers need to make sure that it is their models
that consumers want. Toyota markets most of its products in the US and in
Japan. Therefore it is exposed to fluctuating economic and political conditions
those markets. Perhaps that is why the company is beginning to shift its
attentions to the emerging Chinese market. Movements in exchange rates could
see the already narrow margins in the car market being reduced.



The company needs to keep producing cars
in order to retain its operational
efficiency. Car plants represent a huge investment in expensive fixed costs, as
well as the high costs of training and retaining labour. So if the car market
experiences a down turn, the company could see over capapacity.

If on the other
hand the car market experiences an upturn, then the company may miss out on
potential sales due to under capacity i.e. it takes time to accommodate. This is a
typical problem with high volume car manufacturing.

Opportunities.



Lexus and To
yota now have a reputation for manufacturing environmentally
friendly vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are
based upon advance technologies developed by the organization. Rocketing oil
prices have seen sales of the new hybri
d vehicles increase. Toyota has also sold
on its technology to other motor manufacturers, for example Ford has bought into
the technology for its new Explorer SUV Hybrid. Such moves can only firm up
Toyota's interest and investment in hybrid R&D.



Toyota i
s to target the 'urban youth' market. The company has launched its new
Aygo, which is targeted at the streetwise youth market and captures (or attempts
to) the nature of dance and DJ culture in a very competitive segment. The vehicle
itself is a unique con
vertible, with models extending at their rear! The narrow
segment is notorious for it narrow margins and difficulties for branding.

Threats.



Product recalls are always a problem for vehicle manufacturers. In 2005 the
company had to recall 880,00 sports ut
ility vehicles and pick up trucks due to
faulty front suspension systems. Toyota did not g ive details of how much the
recall would cost. The majority of affected vehicles were sold in the US, while the
rest were sold in Japan, Europe and Australia.



As wi
th any car manufacturer, Toyota faces tremendous competitive rivalry in the
car market. Competition is increasing almost daily, with new entrants coming into
the market from China, South Korea and new plants in Eastern Europe. The
company is also exposed t
o any movement in the price of raw materials such as
rubber, steel and fuel. The key economies in the Pacific, the US and Europe also
experience slow downs. These economic factors are potential threats for Toyota.









SWOT Analysis Wal
-
Mart

Strengths



Wal
-
Mart is a powerful retail brand. It has a reputation for value for money,
convenience and a wide range of products all in one store.



Wal
-
Mart has grown substantially over recent years, and has experienced global
expansion (for example its purchase of
the United Kingdom based retailer
ASDA).



The company has a core competence involving its use of information technology
to support its international logistics system. For example, it can see how
individual products are performing country
-
wide, store
-
by
-
sto
re at a glance. IT
also supports Wal
-
Mart's efficient procurement.



A focused strategy is in place for human resource management and
development. People are key to Wal
-
Mart's business and it invests time and
money in training people, and retaining a develo
ping them.

Weaknesses



Wal
-
Mart is the World's largest grocery retailer and control of its empire, despite
its IT advantages, could leave it weak in some areas due to the huge span of
control.



Since Wal
-
Mart sell products across many sectors (such as cloth
ing, food, or
stationary), it may not have the flexibility of some of its more focused
competitors.



The company is global, but has has a presence in relatively few countries
Worldwide.


Opportunities



To take over, merge with, or form strategic alliances with other global retailers,
focusing on specific markets such as Europe or the Greater China Region.



The stores are currently only trade in a relatively small number of countries.
Therefore there are
tremendous opportunities for future business in expanding
consumer markets, such as China and India.



New locations and store types offer Wal
-
Mart opportunities to exploit market
development. They diversified from large super centres, to local and mall
-
bas
ed
sites.



Opportunities exist for Wal
-
Mart to continue with its current strategy of large,
super centres.

Threats



Being number one means that you are the target of competition, locally and
globally.



Being a global retailer means that you are exposed to
political problems in the
countries that you operate in.



The cost of producing many consumer products tends to have fallen because of
lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to
low
-
cost regions of the World. This has l
ead to price competition, resulting in
price deflation in some ranges. Intense price competition is a threat.



SWOT Analysis Yahoo!

Strengths.



Yahoo!'s Overture is a tremendously profitable Internet advertising business. It
focuses on affiliate advertisi
ng for large advertising accounts, in the same way as
Google's Adsense programme. This is an important income stream for Yahoo!.



Yahoo! has over 350 million users of its services and solutions. This makes it a
very powerful marketing company, with a very
well known brand. Some reports
indicate that is it is the most popular website in the World.



A key long
-
term strength is Yahoo!'s international business presence. As the
Internet expands and it is adopted by more nations the opportunities for Internet
bran
ds begin to emerge. Yahoo! is well placed to take advantage of these
opportunities with its strategic business units in Asia, Europe and Australia.



The Yahoo! Directory is an original source of structured information. It has built
over the last decade, an
d unlike mainstream search engines, its content is
moderated (i.e. sites are vetted before their inclusion).

Weaknesses.



Differentiation is difficult for Yahoo!. Almost all of its packaged services are
available from other sources.

1.

(i
) Search facilities are available on MSN and Google.

2.

(ii) Free E
-
mail accounts are available from Hotmail (MSN) or G
-
Mail
(Google), and many, many others.

3.

(iii) New is available from CNN or the BBC.

4.

(iv) Shopping is available everywhere on the Internet.

Google has Froogle.



Online advertising is a new income stream for organizations such as MSN,
Yahoo! and Goggle. Yes, today they are very, very profitable. However, as
technology develops and new unforeseen advertising media emerge, the future
is uncertai
n for these income streams. This is a weakness for Yahoo! and its
competitors.



Another income stream that has been key to Yahoo! is derived from its
partnerships with telecommunication providers. For example, you buy an Internet
connection package from yo
ur local telephone company, and it includes a fee
-
based Yahoo! package including e
-
mail accounts, user support and other added
value services. If ever this channel is changed or removed, the income stream
would be affected.

Opportunities



The international

market is a huge opportunity for Yahoo!. Yahoo!, Microsoft and
Google are busy carving niches and taking over businesses in are around the
Greater China Region. China has over 1,200,000,000 citizens. Other economies,
such as India, also offer tremendous g
rowth potential.



The Development of the Yahoo! Directory has potential for new business and
income streams. Two thirds of organizations in Ohmae's Triad (Europe, Japan
and the USA) are Small Medium Enterprises (SME'). SME's are potential
directory adverti
sers.



Mobile technologies offer another opportunity for Yahoo!. Today we access the
Internet using personal computers. Tomorrow phones, televisions, personal
organisers, music players and computers will merge and morph. The mobile
devices of the future wi
ll need services and solutions. Yahoo! would be well
placed to provide many of them.


Threats.



The biggest threat for all web
-
based organization is competition. Huge profits
attract investors, innovators and entrepreneurs. Dotcom fever has not gone
away,

it is now more focused on profit delivery. All of Yahoo!'s key services have
competitors such as AOL, Google and many others.



International, culture specific competitors could affect Yahoo! in the future, unless
strategic alliances are forged. China has
developed its own search engines, as
has India. Why should the World use USA based companies such as Yahoo!?
There needs to be a series of substantial competitive advantages to see the
business remain as an international brand. Look at what has been learne
d from
the global car industry, or electronics industry.

SWOT Analysis General Motors

Introduction

General Motors is an omnipresent company in the United States, a company so
essential to the overall health of the U.S economy that it spawned the phrase
“as GM
goes, so goes the nation”. Long known for the manufacturing of cars, trucks and
automobiles, General Motors has also engaged in finance and insurance.

However, most recently the global recession has had a devastating impact on its, cash
flows, finan
cial condition and operations. To survive, the company has had to accept a
government bailout plan and its employees the United Autoworkers of America, has
also made concessions. This SWOT analysis is about General Motors.



Strengths



Branding

-

Born in De
troit Michigan in 1910 General motors has produced a
stable of automobiles such as Chevrolet, Pontiac Cadillac and Buick which have
become household names in the U.S. As such, the General Motors Brand is well
rooted not only in America but throughout the w
orld.



Worldwide Presence

-

General Motors truly has an international presence with
factories in Poland, Russia, South Africa Ecuador, Egypt, Germany, Argentina,
Australia, Belgium, Brazil, China, Colombia, South Korea, Spain, Sweden, and
Thailand. The comp
any is even in Viet Nam. In addition, it also has assembly,
manufacturing, distribution, office and warehousing operations in 55 other
countries.

Weaknesses



Diminishing Dealer Network

-

General Motors has compiled a list of more than
1,000 dealerships mark
et for closure. The company has announced that it will not
renew its franchise agreements with nearly one quarter of its U.S. dealerships.
As of December 31, 2008, GM had 715 dealerships in Canada, as recent as May
of 2009 plans called for a anywhere from
40 to 200 closures.



Insufficient Liquidity

-

General Motors has experienced a reduction in liquidity to
$14 billion in FY2008 from $27.3 billion in 2007. Losses are attributed to lower
sales volumes and a reduction in working capital. Both research and
dev
elopment, as well as relationships with suppliers are negatively affected by
the reduced liquidity.



Inadequate Performance among Some Business Segments

-

In 2008 the GME
segment accounted to 21.8% of the total revenues and its revenues decreased
8.8% to $3
2,440 million. Other business segments experiencing declines include
GMNA which fell 23.9% to $82,938 million, and GMAP which stood at $12,477
million for FY 2008, a decline of 15%.



Low Debt Ratings

-

Four independent credit rating agencies assess GMs debt

ratings and ability to pay interest, dividends and principal on securities. Moodys
Investor Service, Fitch Ratings DBRS and Standard & Poors evaluate GM. As of
2008, all four had downgraded their assessment ratings for GM.

Opportunities



Growth Potential i
n India and China

-

There are positive projects for GM business
in China and India. In China the market for new cars is in the midst of a 14%
growth rate projected to reach over $97 billion in 2008. Meanwhile in India, the
market for new cars grew by 15.5%

in 2008 to a dollar value of $28 billion. A sign
that India will play an even bigger is the projected increase to 2.5 million units by
the end of 2013.



Increased Global Truck Market

-

Steady growth rates are projected in the next
few years. The market's v
olume is expected to rise to 21.5 million units by the
end of 2013. The light commercial vehicles segment was the market’s largest in
2008, generating total volumes of 9.8 million units, equivalent to 58.1% of overall
value.



Rising Demand for Hybrid Vehicl
es

-

General Motors produces six hybrid models
in the US including the Saturn Vue and Aura Hybrids, Chevrolet Malibu and
Tahoe Hybrids, GMC Yukon Hybrid as well as a Cadillac Escalade Hybrid. The
company is also investing in hybrid and plug
-
in vehicles, fo
r both cars and trucks.
It is anticipated that GM will produce up to nine hybrid models following the
introduction of the Chevrolet Silverado Hybrid and GMC Sierra Hybrid.
International demand for light hybrid electric vehicles (HEVs) is expected to
increa
se. It is expected to rise to 800,000 units in 2009 and estimated to reach
4.5 million units in 2013. Therefore, a positive outlook for light hybrid electric
vehicles and plug
-
in vehicles market would boost the demand for GM’s products.


Threats



The Contin
uing Global Recession

-

Dire predictions for the global economy were
realized in 2009 and stalled economic growth continued into 2010. The economic
decline reduced consumer demand for less fuel efficient vehicles, including full
size pick
-
up trucks and spo
rt utility vehicles, which had been GM’s most
profitable products. In addition, the economic climate has resulted in tighter credit
markets making it harder for consumers to finance automobile purchases.



Weakness in Global Automobile Industry

-

Consumer Re
quirements for
commercial vehicles declined in the NAFTA region, Western Europe and Japan.
The Western European automobile markets suffered as well particularly the
volume markets of Spain down 28.1%, Italy down 13.4% and the UK down
11.3%. Germany decline
d 1.8%) and France 0.7% also experienced downward
trend in the second half of 2008. In total, 8.4% fewer automobiles were sold in
Western Europe. The Japanese car market also declined, with a drop in sales of
nearly 4% in 2008.



Intense competition

-

GMs fi
nancial status makes it vulnerable to fierce
competition from fits such as AB Volvo, Bayerische Motoren Werke, Daimler, Fiat
Group Automobiles, Ford Motor, Honda Motor, Hyundai Motor, Isuzu Motors,
Mazda Motor, Nissan Motor, PACCAR, PSA Peugeot Citroen, Re
nault, Toyota
Motor and Volkswagen. Many have responded to the crises by adding vehicle
enhancements, providing subsidized financing or leasing programs in order to
sell more vehicles. They are also offering option package discounts, other
marketing incent
ives and are reducing vehicle prices in certain markets. These
actions are expected to have a negative effect on GM’s vehicle pricing, market
share and operating results particularly on the low end of the market.


SWOT Analysis Starbucks

Strengths.



Starbucks Corporation is a very profitable organization, earning in excess of
$600 million in 2004.The company generated revenue of more than $5000 million
in the same year.



It is a global coffee brand built upon a reputation for fine products and service
s. It
has almost 9000 cafes in almost 40 countries.



Starbucks was one of the
Fortune Top 100 Companies to Work For

in 2005. The
company is a respected employer that values its workforce.



The organization has strong ethical values and an ethical mission s
tatement as
follows,
'Starbucks is committed to a role of environmental leadership in all facets
of our business.'

Weaknesses.



Starbucks has a reputation for new product development and creativity.
However, they remain vulnerable to the possibility that th
eir innovation may falter
over time.



The organization has a strong presence in the United States of America with
more than three quarters of their cafes located in the home market. It is often
argued that they need to look for a portfolio of countries, in

order to spread
business risk.



The organization is dependant on a main competitive advantage, the retail of
coffee. This could make them slow to diversify into other sectors should the need
arise.


Opportunities.



Starbucks are very good at taking advant
age of opportunties. In 2004 the
company created a CD
-
burning service in their Santa Monica (California USA)
cafe with Hewlett Packard, where customers create their own music CD.



New products and services that can be retailed in their cafes, such as Fair Trade
products.



The company has the opportunity to expand its global operations. New markets
for coffee such as India and the Pacific Rim nations are beginning to emerge.



Co
-
bran
ding with other manufacturers of food and drink, and brand franchising to
manufacturers of other goods and services both have potential.

Threats.



Who knows if the market for coffee will grow and stay in favour with customers,
or whether another type of be
verage or leisure activity will replace coffee in the
future?



Starbucks are exposed to rises in the cost of coffee and dairy products.



Since its conception in Pike Place Market, Seattle in 1971, Starbucks' success
has lead to the market entry of many com
petitors and copy cat brands that pose
potential threats.




SWOT Analysis Bharti Airtel

Strengths



Bharti Airtel

has more than 65 million customers (July 2008). It is the largest
cellular provider in India, and also supplies broadband and telephone servic
es
-

as well as many other telecommunications services to both domestic and
corporate customers.



Other stakeholders in
Bharti Airtel

include Sony
-
Ericsson, Nokia
-

and Sing Tel,
with whom they hold a strategic alliance. This means that the business has
access to knowledge and technology from other parts of the telecommunications
world.



The company has covered the entire Indian nation
with its network. This has
underpinned its large and rising customer base.

Weaknesses



An often cited original weakness is that when the business was started by Sunil
Bharti Mittal over 15 years ago, the business has little knowledge and experience
of how
a cellular telephone system actually worked. So the start
-
up business had
to outsource to industry experts in the field.



Until recently Airtel did not own its own towers, which was a particular strength of
some of its competitors such as Hutchison Essar.
Towers are important if your
company wishes to provide wide coverage nationally.



The fact that the Airtel has not pulled off a deal with South Africa's MTN could
signal the lack of any real emerging market investment opportunity for the
business once the
Indian market has become mature.


Opportunities



The company possesses a customized version of the Google search engine
which will enhance broadband services to customers. The tie
-
up with Google can
only enhance the Airtel brand, and also provides advertis
ing opportunities in
Indian for Google.



Global telecommunications and new technology brands see Airtel as a key
strategic player in the Indian market. The new iPhone will be launched in India
via an Airtel distributorship. Another strategic partnership is

held with BlackBerry
Wireless Solutions.



Despite being forced to outsource much of its technical operations in the early
days, this allowed Airtel to work from its own blank sheet of paper, and to
question industry approaches and practices
-

for example
replacing the
Revenue
-
Per
-
Customer model with a Revenue
-
Per
-
Minute model which is better
suited to India, as the company moved into small and remote villages and towns.



The company is investing in its operation in 120,000 to 160,000 small villages
every y
ear. It sees that less well
-
off consumers may only be able to afford a few
tens of Rupees per call, and also so that the business benefits are scalable
-

using its 'Matchbox' strategy.



Bharti Airtel is embarking on another joint venture with Vodafone Essa
r and Idea
Cellular to create a new independent tower company called Indus Towers. This
new business will control more than 60% of India's network towers. IPTV is
another potential new service that could underpin the company's long
-
term
strategy.




Threa
ts



Airtel and Vodafone seem to be having an on/off relationship. Vodafone which
owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead
invested in its rival Hutchison Essar. Knowledge and technology previously
available to Airtel now

moves into the hands of one of its competitors.



The quickly changing pace of the global telecommunications industry could tempt
Airtel to go along the acquisition trail which may make it vulnerable if the world
goes into recession. Perhaps this was an im
pact upon the decision not to
proceed with talks about the potential purchase of South Africa's MTN in May
2008. This opened the door for talks between Reliance Communication's Anil
Ambani and MTN, allowing a competing Inidan industrialist to invest in the

new
emerging African telecommunications market.



Bharti Airtel could also be the target for the takeover vision of other global
telecommunications players that wish to move into the Indian market.






SWOT Analysis Dell

Strengths.



Dell is the World's
largest PC maker. Profits for the 3 months to July 2005 were
in excess of $1 billion US, representing a growth of around 28%. For the last
couple of years it has held its position as market leader (it took it from rivals
Hewlett
-
Packard). The Dell brand is

one of the best known and renowned
computer brands in the World.



Dell cuts out the retailer and supplies directly to the customers. It uses
information technology, and Customer Relationship Management (CRM)
approaches to capture data on its loyal consumer
s. So a customer selects a
generic PC model, and then adds items and upgrades until the PC is kitted out to
the customer's own specification. Components are made by suppliers, never by
Dell. PC's are assembled using relatively cheap labour. You can even ke
ep track
of your delivery by contacting customer services, based in India. The finished
goods are then dropped off with the customer by courier. Dell has total command
of the supply chain.

Weaknesses.



The company has such a huge range of products and comp
onents from many
suppliers from a plethora of countries, that there is the occasional product recall
that can cause Dell some embarrassment. In 2004 Dell had to recall 4.4 million
laptop adapters because of a fear that they could overheat, causing electric

shocks or fires.



Dell is a computer maker, not a compute manufacturer. It buys from a group of
concentrated hi
-
tech component manufacturers. Whilst this is a tremendous
advantage in terms of business operations, allowing Dell to focus on marketing
and lo
gistics, the company is reliant on a few large suppliers, and to an extent is
locked in for periods of time (i.e. unable to switch supply dues to the lack of large
suppliers in the World).

Opportunities.



Kevin Rollins replaced Michael Dell in 2004 as Dell
's Chief Executive Officer. Dell
remained the company's Chairman. Despite founder Dell's massive success,
new blood and a change in management thinking could lead the company into a
new, even more profitable period. Dell was born in 1965, and founded Dell
in
1984 with $1000 whilst studying at the University of Texas. He became the
youngest Fortune 500 CEO in 1992, and will be a tough act to follow.



Dell is pursuing a diversification strategy by introducing many new products to its
range. This initially has meant good such as peripherals including printers and
toners, but now also included LCD televisions and other non
-
computing goods.
So Dell compete

against iPod and other consumer electronics brands.



Dell is making and selling low
-
cost, low
-
price computers to PC retailers in the
United States. The PC's are unbranded and should not be recognised as being
Dell when the consumer makes a purchase. Rebra
nding and rebadging for
retailers, although a departure for Dell, gives the company new market segments
to attack with the associated marketing costs.

Threats.



The single biggest problem for Dell is the competitive rivalry that exists in the PC
market glo
bally. As with all profitable brands, retaliation from competitors and
new entrants to the market pose potential threats. Dell sources from Far Eastern
nations where labour costs remain low, but there is nothing stopping competitors
doing the same
-

even s
ourcing the same or similar components from the same
or similar suppliers. Remember, Dell is a PC maker, not a PC manufacturer.



Dell, being global in its marketing and operations, is exposed to fluctuations in
the World currency markets. Although it is a
very lean organization, orders do
have to be placed some time ahead due to their size or value. Changes in
exchange rates could leave the company exposed to potential loses in parts of its
supply chain.

SWOT Analysis eBay

Strengths.



eBay

is the leading global brand for online auctions. The company is a giant
marketplace used by more than 100 million people to buy and sell all manner of
things to each other. Pierre Omidyar, a French entrepreneur, was just 28 when
he sat down over a long ho
liday weekend to write the original computer code for
what eventually became an Internet megabrand. The brand has grown
tremendously over the decade or so since its conception.



The company exploits the benefits of Customer Relationship Management
(CRM). B
uyers and sellers register with the company and data is collected by
eBay on individuals. This is the Business
-
to
-

Consumer (B2C) side of their
business. However the strong customer relationships are founded on a
Consumer
-
to
-
Consumer (C2C) business model,
where strong interrelationships
occurs, for example where buyers and sellers leave feedback for each other, and
whereby awards are given to the most genuine of eBayers.



The term 'eBay' has become a generic term for online auctions. Other companies
with su
ch a strong position include Hoover for vacuum cleaners, and Google for
search engines. Today it is common to hear that someone is 'ebaying' or is an
'eBayer,' or that someone is going 'to eBay.'


Weaknesses.



The organizations works

tremendously hard to overcome fraud. However, the
eBay model does leave itself open to a number of fraudulent activities. Often the
company deals with such activities very quickly. Fraud includes counterfeit goods
being marketed to unsuspecting (and suspe
cting!) eBayers. Other forms of theft
could include the redistribution of stolen goods. It should be pointed out that
fraud and theft are problems with individuals, not eBay. The weakness is that
unscrupulous individuals can exploit the C2C business model.




As with many technology companies, systems breakdowns could disturb the
trading activities of eBay. In the past both eBay and its payment brand Paypal
have encountered shutdowns and outages. As technology improves such a
weakness is less and less of an i
ssue.

Opportunities.



Acquisitions provide new business strategy opportunities. eBay has agreed to
buy online telephone company Skype Technologies in a deal reported to be
worth $2.6 billion. Skype's software lets PC users talk to each other for free and
m
ake cut
-
price calls to mobiles and landlines. eBay has been buying up firms
-

including payment system PayPal
-

in an effort to increase the number of
services it offers to consumers and keep its profits growing.



New and emerging markets provide opportuni
ties (Market Development).
Countries include China and India. There, consumers are becoming richer and
have more leisure time than previous generations.
Aspirating consumers

are a
growing segment in many developing nations.



There are also still opportunit
ies in current markets (Market Penetration).
Western Europe and the USA still have many potential consumers that have yet
to discover the benefits of online auctions. Remember products have life cycles
that eventually come to an end, and such products are
ideal for selling and
buying on eBay.

Threats.



As with many of the global Internet brands, success attracts competition.
International competitors competing in their domestic markets may have the
cultural experience that could give them a competitive adva
ntage over eBay. In
fact eBay has found that it has met with other USA
-
based Internet companies
when trading overseas. For example, Yahoo! dominates the Japanese market.



Attack by illegal practices is a threat. As with weaknesses above, the brand is
attac
ked by unscrupulous individuals. For example e
-
mails are sent to
unsuspecting eBayers pretending to come from eBay. Logos and the design of
the pages look authentic. However they are designed so that you input private
information that the thieves can use t
o take passwords and identifications.
-
so
beware!



Some costs cannot be controlled by eBay. For example delivery charges and
credit card charges. If fuel prices were to rise, the cost is passed on to the
consumer in terms of delivery and postal fees. This
could make the overall cost
of an auctioned item too expensive. Similarly, if a credit card company such as
Visa or Mastercard imposed a charge for online transaction, the total cost of the
same items would increase with similar consequences.




SWOT Anal
ysis China Mobile

Corporate Overview

China Mobile Limited

was started in 1997. Originally it was called China Telecom (Hong
Kong) and then China Mobile (Hong Kong) and finally
China Mobile Limited

as we know
it today. Its public offering in 1997 generated capital of USD $2.5 million, and a further
massive investment of global capital (around USD $600 million) was made in 2004.

Today it trades in 31 provinces of China and essentially offers a Global

System for
Mobile Communications (GSM) which covers almost the entire nation. The business
makes money from its voice
-
based services and other value
-
added services such as
SMS text, mobile e
-
mail and similar services. This
SWOT analysis

is about China
Mobile.

Strengths



China Mobile was listed fifth in Millward Brown's Brandz Top 100 Brands in 2007.
This would have be

unheard of 10 years ago (or even less). The news means
that the company is becoming more than a business since it is now also a brand
i.e. possessing brand equity and brand value. Other Chinese brands to break the
top 100 were the Bank of China, the Chine
se Construction Bank and IBBC. It is
argued by many that Chinese companies are not strong in relation to marketing
but perhaps things are changing.



The company has made good profits over recent years.



China Mobile has gone down the acquisition trail on a

number of occasions. In its
early days it took over Jiangsu Mobile (1997). Other important acquisitions
include Fujian Mobile, Henan Mobile, and Hainan Mobile (1999);
-

and Beijing
Mobile, Shanghai Mobile, Tianjin Mobile and Hebei Mobile (2000). These
dev
elopments have delivered strong growth.



China Mobile is number one in the Chinese market. It recorded a 67.5% market
share in 2006. It is the world's largest digital mobile company, and serves more
customers than any other mobile supplier.

Weaknesses



Acc
ording to the head of China Mobile, China's home
-
grown mobile technology is
a few years behind that of its international competitors since it was having
problems with handsets. Essentially 3G technology was lagging behind. Part of
the problem was the choic
e to swap to TD
-
SCDMA's network which many would
consider inferior to the 3G technology offered by European and American
alternatives (which their competitors have decided to adopt).



The company is not globally diversified. Telecoms companies tend to trad
e in
more than one country, usually through acquisition, joint
-
ventures or strategic
alliances (for example see the
SWOT analysis of Bharti Airtel
). This may leave
the company exp
osed if the Chinese market were to go into a deep or sustained
decline.

Opportunities



The Chinese economy has undergone enormous growth, which has lead to the
huge demand for mobile telephones, devices and technologies. According to the
Chinese Government
, China is the world's largest mobile market with 520 million
mobile phone users. This number could reach 600 million by 2010.



Budget users in China are driving growth in the mobile telecoms sector. China
Mobile reported a net profit between January and M
arch 2008 of around 24.1bn
yuan (£3.4bn; £2.2bn) which is a rise of 37% on 2007 according to BBC News.



Since the cities have become saturated, much of the new growth is predicted for
rural China and it is this segment that is most likely to be targeted by

the large
operators. 3G technologies provide the largest opportunity for China Telecom.

Threats



New subscribers are mainly low
-
use, low
-
value. So average revenue is falling as
the mobile phone market matures and the market becomes more price
competitive.

So mobile phone suppliers are awaiting the introduction of 3G
mobile technologies to rejuvenate the market and stimulate demand as Chinese
customers consume the new added value services.



China Mobile could face more competition in the future as the Chine
se
Government plans to allow more operators into the market. China Mobile has
70% of the 2G market in China. China Unicom wants to become the biggest 3G
operator, and China Telecom aims to win 15% of the 3G market by 2010.



China Mobile has a number of ser
vice obligations under agreements with the
Chinese (PRC) Government. So the business may be obliged to provide
unprofitable services that pay a social dividend. Added to this the Ministry of
Information and Industry has allocated a limited frequency (44MHz
) to the
company which will not support large numbers of subscribers in the future.






SWOT Analysis PepsiCo

Strengths



Branding

-

One of PepsiCo’s top brands is of course Pepsi, one of the most
recognized brands of the world, ranked according to
Interbrand. As of 2008 it
ranked 26th amongst top 100 global brands. Pepsi generates more than $15,000
million of annual sales. Pepsi is joined in broad recognition by such PepsiCo
brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lay’s Potato
Chips, Lipton Teas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos
Corn, Tostitos Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water,
Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato
Chips, Mirinda, Tostitos T
ortilla Chips, and Sierra Mist.



The strength of these brands is evident in PepsiCo’s presence in over 200
countries. The company has the largest market share in the US beverage at
39%, and snack food market at 25%. Such brand dominance insures loyalty and
repetitive sales which contributes to over $15 million in annual sales for the
company



Diversification

-

PepsiCo’s diversification is obvious in that the fact that each of
its top 18 brands generates annual sales of over $1,000 million. PepsiCo’s
arsenal
also includes ready
-
to
-
drink teas, juice drinks, bottled water, as well as
breakfast cereals, cakes and cake mixes.This broad product base plus a multi
-
channel distribution system serve to help insulate PepsiCo from shifting business
climates.



Distribution

-

The company delivers its products directly from manufacturing
plants and warehouses to customer warehouses and retail stores. This is part of
a three pronged approach which also includes employees making direct store
deliveries of snacks and beverages a
nd the use of third party distribution
services.

Weaknesses



Overdependence on Wal
-
Mart

-

Sales to Wal
-
Mart represent approximately 12%
of PepsiCo’s total net revenue. Wal
-
Mart is PepsiCo’s largest customer. As a
result PepsiCo’s fortunes are influenced by
the business strategy of Wal
-
Mart
specifically its emphasis on private
-
label sales which produce a higher profit
margin than national brands. Wal
-
Mart’s low price themes put pressure on
PepsiCo to hold down prices.



Overdependence on US Markets

-

Despite it
s international presence, 52% of its
revenues originate in the US. This concentration does leave PepsiCo somewhat
vulnerable to the impact of changing economic conditions, and labor strikes.
Large US customers could exploit PepsiCo’s lack of bargaining pow
er and
negatively impact its revenues.



Low Productivity

-

In 2008 PepsiCo had approximately 198,000 employees. Its
revenue per employee was $219,439, which was lower that its competitors. This
may indicate comparatively low productivity on the part of Peps
iCo employees.



Image Damage Due to Product Recall

-

Recently (2008) salmonella
contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from
retail shelves. This followed incidents of exploding Diet Pepsi cans in 2007. Such
occurrences damag
e company image and reduce consumer confidence in
PepsiCo products.

Opportunities



Broadening of Product Base

-

PepsiCo is seeking to address one of its potential
weaknesses; dependency on US markets by acquiring Russia’s leading Juice
Company, Lebedyansky,

and V Wwater in the United Kingdom. It continues to
broaden its product base by introducing TrueNorth Nut Snacks and increasing its
Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo to
adjust to the changing lifestyles of its
consumers.



International Expansion

-

PepsiCo is in the midst of making a $1, 000 million
investment in China, and a $500 million investment in India. Both initiatives are
part of its expansion into international markets and a lessening of its dependence
on US sales. In addition the company

plans on major capital initiatives in Brazil
and Mexico.



Growing Savory Snack and Bottled Water market in US

-

PepsiCo is positioned
well to capitalize on the growing bottle water market which is projected to be
worth over $24 million by 2012. Products su
ch as Aquafina, and Propel are well
established products and in a position to ride the upward crest.PepsiCo products
such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla
chips, Fritos corn chips, Ruffles potato chips, Sun Chip
s multigrain snacks, Rold
Gold pretzels, Santitas are also benefiting from a growing savory snack market
which is projected to grow as much as 27% by 2013, representing an increase of
$28 million.

Threats



Decline in Carbonated Drink Sales

-

Soft drink sale
s are projected to decline by
as much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the
process of diversification, but is likely to feel the impact of the projected decline.



Potential Negative Impact of Government Regulations

-

It is anti
cipated that
government initiatives related to environmental, health and safety may have the
potential to negatively impact PepsiCo. For example, manufacturing, marketing,
and distribution of food products may be altered as a result of state, federal or
lo
cal dictates. Preliminary studies on acrylamide seem to suggest that it may
cause cancer in laboratory animals when consumed in significant amounts. If the
company has to comply with a related regulation and add warning labels or place
warnings in certain
locations where its products are sold, a negative impact may
result for PepsiCo.



Intense Competition

-

The Coca
-
Cola Company is PepsiCo’s primary
competitors. But others include Nestlé, Groupe Danone and Kraft Foods. Intense
competition may influence prici
ng, advertising, sales promotion initiatives
undertaken by PepsiCo. Resently Coca
-
Cola passed PepsiCo in Juice sales.



Potential Disruption Due to Labor Unrest

-

Based upon recent history, PepsiCo
may be vulnerable to strikes and other labor disputes. In 20
08 a strike in India
shut down production for nearly an entire month. This disrupted both
manufacturing and distribution.

SWOT Analysis ITC

ITC is one of India's biggest and best
-
known private sector companies. In fact it is one
of the World's most high pr
ofile consumer operations. This
SWOT analysis

is about ITC.
Its businesses and brands are focused almost entirely on the Indian markets, and
despite being most well
-
known for its tobacco brands such as Gold Flake, the business
is now diversifying into new FMCG (Fast Moving Consumer Goods) brands in a

number
of market sectors

-

including cigarettes, hotels, paper, agriculture, packaged foods and confectionary,
branded apparel, personal care, greetings cards, Information Technology, safety
matches, incense sticks and stationery. Examples of its successf
ul new FMCG products
include:



Aashirvaad
-

India's most popular atta brand with over 50% market share. It is
also present in spices and instant mixes.



Mint
-
o
-

Mint
-
0 Fresh is the largest cough lozenge brand in India.



Bingo!
-

a new introduction of fing
er snacks.



Kitchens of India
-

pre
-
prepared foods designed by ITC's master chefs.



Sunfeast
-

is ITC's biscuit brand (and the sub
-
brand is also used on some pasta
products).


Strengths

ITC

leveraged it traditional businesses to develop new brands for new segments. For
example,
ITC

used its experience of transporting and distributing tobacco products to
remote and distant parts of India to the advantage of its FMCG products. ITC master
chefs

from its hotel chain are often asked to develop new food concepts for its FMCG
business.

ITC is a diversified company trading in a number of business sectors including
cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded
appar
el, personal care, greetings cards, Information Technology, safety matches,
incense sticks and stationery.

Weaknesses

The company's original business was traded in tobacco. ITC stands for Imperial
Tobacco Company of India Limited. It is interesting that a
business that is now so
involved in branding continues to use its original name, despite the negative connection
of tobacco with poor health and premature death.

To fund its cash guzzling FMCG start
-
up, the company is still dependant upon its
tobacco reven
ues. Cigarettes account for 47 per cent of the company's turnover, and
that in itself is responsible for 80% of its profits. So there is an argument that ITC's
move into FMCG (Fast Moving Consumer Goods) is being subsidised by its tobacco
operations. Its G
old Flake tobacco brand is the largest FMCG brand in India
-

and this
single brand alone hold 70% of the tobacco market.



Opportunities

Core brands such as Aashirvaad, Mint
-
o, Bingo! And Sun Feast (and others) can be
developed using strategies of market d
evelopment, product development and marketing
penetration.

ITC is moving into new and emerging sectors including Information Technology,
supporting business solutions.

e
-
Choupal is a community of practice that links rural Indian farmers using the Internet.

This is an original and well thought of initiative that could be used in other sectors in
many other parts of the world. It is also an ambitious project that has a goal of reaching
10 million farmers in 100,000 villages. Take a look at eChoupal here
http:
//www.itcportal.com/agri_exports/e
-
choupal_new.htm

ITC leverages e
-
Choupal in a novel way. The company researched the tastes of
consumers in the North, West and East of India of atta (a popular type of wheat flour),
then used the network to source and cre
ate the raw materials from farmers and then
blend them for consumers under purposeful brand names such as Aashirvaad Select in
the Northern market, Aashirvaad MP Chakki in the Western market and Aashirvaad in
the Eastern market. This concept is tremendousl
y difficult for competitors to emulate.

Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate into the
country's premier FMCG business.

Per capita consumption of personal care products in India is the lowest in the world
offering an

opportunity for ITC's soaps, shampoos and fragrances under their Wills
brand.



Threats

The obvious threat is from competition, both domestic and international. The laws of
economics dictate that if competitors see that there is a solid profit to be made
in an
emerging consumer society that ultimately new products and services will be made
available. Western companies will see India as an exciting opportunity for themselves to
find new market segments for their own offerings.

ITC's opportunities are likely

to be opportunities for other companies as well. Therefore
the dynamic of competition will alter in the medium
-
term. Then ITC will need to decide
whether being a diversified conglomerate is the most competitive strategic formation for
a secure future.

SWO
T Analysis Indian Premier League
(IPL)

Where will you find the Mumbai Indians, the Royal Challengers, the Deccan Chargers,
the Channai Super Kings, the Delhi Daredevils, the Kings XI Punjab, the Kolkata Knight
Riders and the Rajesthan Royals? In the
Indian

Premier League (IPL)

-

the most
exciting sports franchise that the World has seen in recent years, with seemingly
endless marketing opportunities (and strengths, weaknesses and threats of course!).
This
SWOT analysis

is about The Indian Premier League.

Strengths



The Indian Premier League (IPL) is based upon the Twenty20 cricket game
which should be completed in 2 ½ hours. That means that is fast
-
paced and
exciting, and moreover it can be played on a weekday evening or weekend
afternoon. That makes it very appealin
g as a mass sport, just like American
Football, Basketball and Soccer. It is appealing as a spectator sport, as well to
TV audiences.



The IPL has employed economists to structure its lead so that revenue is
maximized. The more unified the sport, the more
successful it is.

Weaknesses



Twenty20 has been so popular that it could replace other forms of cricket i.e.
damage the game that generated it.



Some fans will also have to pay for travel to the ground. There may be large
queues for the most popular games.

There may be some distance between
where the fan lives and the cricket ground.



Stakes are very high! Some teams may not weather short
-
term failures and may
be too quick to get rid of key managers and players if things don't go well quickly.
Famously, Roy
al Challengers Bangalore (RCB) sacked their CEO Charu Sharma
for watching his team lose 6 from their first 8 games.



Some teams have overpriced their advertising/sponsorship in order to gain some
short
-
term returns (e.g. Royal Challengers), and some sponso
rs and are moving
their investment the more reasonably priced teams.

Opportunities



Since it has a large potential mass audience, IPL is very attractive as a marketing
communications opportunity, especially for advertisers and sponsors.



The league functio
ns under a number of franchises. Each franchisee is
responsible for marketing its team to gain as large a fan
-
base as possible. The
long
-
term success of all of the franchises lies in the generation of a solid fan
-
base. The fan
-
base will generate large TV r
evenues.



Different fans will pay different amounts to watch their sport. There will be
corporate hospitality, season tickets, away tickets, TV pay
-
per
-
view and other
ways to segment the market for the IPL.



There is a huge opportunity for merchandising e.
g. sales of shirts, credit cards
and other fan memorabilia. Grounds can also sell refreshments and other
services during the games.



Marketers believe that the teenage segments need to be targeted so that they
become the long
-
term fan
-
base. Their parents a
nd older cricket fans may prefer
the longer, more traditional game. The youth market may also impress on their
parents that they want them to buy their club's merchandise on their behalf
-

as a
differentiator or status symbol.



Franchise fees will remain f
ixed for the up until 2017
-
18, which means that the
investment is safe against inflation which is traditionally relatively high in India.

Threats



The level of competition that the Board of Control for Cricket in India (BCCI) can
generate determines long
-
t
erm viability of the league. If the level of competition
drops, then revenue will fall. For example, if the top names in cricket cannot be
attracted to India, the appeal of the game will fall. Often getting hold of the big
names is a problem
-

Australian d
omestic cricket runs concurrent with the IPL
and if players move form Australia to India to follow the money then their
domestic game will be hit. This is known as 'Free Agency.'



If the franchisee's fan
-
base does not generate income then they may not have

the cash to pay the salaries of the best players. However, if you invest in the best
players and they do not win the trophies, then you may not see a return on your
investment. It won't be a quick return on investment
-

so owners need to be in it
for the
long
-
term.



Franchises are very expensive. The most expensive franchise
-

Mumbai Indians
-

was bought by Mukesh Ambani for $111.9 million, whereas the lowest priced
franchise
-

Rajasthan Royals was picked up by Manoj Badale for a mere $67
million.



The mos
t highly priced teams may not be those that have the early success.
Revenues will come from the most highly supported teams.