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Born in 1947
Graduated from Princeton
University in 1969
Mr. D.K Jain The chairperson of Luxor Writing Instruments Ltd up with
an idea of launching Felt Tipped Pens in India in the Year 1963.
Despite of being pioneers, Luxor could not maintain its supremacy in
the industry.
Threat of Substitute
Products:
Due to the existence of close substitutes the propensity
of customers to switch to alternatives in response to
price increases:
Buyer Propensity to Substitute
Relative price performance of substitutes
Buyer switching costs
Current trends
In the year 1996, ADD Corporation Ltd came up with the
launch of Gel pens in the Indian market.
The company made a deal with 'OHTO' of Japan to provide
technology for manufacturing Gel Pens which were launched at Rs.
20/- under the brand name 'ADD'.
A premium quality product assuring a smooth writing positioned
itself as a substitute to both the pilot pens and the other low-end
ball pens priced between Rs 4/- to Rs. 6/.
Threat of entry of new competitors:
Profitable markets will attract new entrants, which will
effectively decrease profitability:
The existence of barriers to entry (patents, rights etc)
Learning curve advantage
Legislation and government policies
Huge capital requirements
Access to distribution
Entry of brands like: Cello, ADD Gel, Montex, Renolds and Linc
pens in the industry.
Smaller players such as Lexi, Agni and Elkos for examples have
also been able to maintain their share on a regional or select pocket
level.
Key barriers to entry:
Economies of scale
Capital / investment requirements
Customer switching costs
Access to industry distribution channels
The likelihood of retaliation from existing industry
players.
Inability of luxor to prevent entry of competitors like cello, led to
sharing of the market with such new players cello entered in 1994.
with just one model of clear pens.
From the modest production of 20 Lakh pens per month, CWICL
today produces 500 lac pens per month.
The production of Luxor on the other hand relies to a great extent on
the Job work from external Vendors or Ancillary Units
Bargaining Power of
Suppliers:
If suppliers have high bargaining power over a company,
then in theory the company's industry is less attractive,
it could happen due to:
There are many buyers and few dominant suppliers
There are undifferentiated, highly valued products.
Suppliers threaten to integrate forward into the industry