Competitive Analysis of Stihl Chain

This is an extensive study of competitive analysis of a wood cutting products, Stihl chain saw. Stihl chain saw is two leading chainsaws brand available in Nepal. Stihl Chain saws quality are top notch with great fuel efficiency and less carbon emission. Stihl chain saws brand is major players in global chainsaw market. In the process of competitive analysis, we will use marketing mix 4p’s to analyze the product in respect to its direct competitors.

Direct competitors chosen for Stihl are chain saw giant Zhejiang Zomax Garden Machinery. The objective of this competitive analysis on Stihl is to provide insight on how Stihl have competitive advantage over its direct competitors. The research method used for this analytical purpose are secondary sources books, journal articles, newspaper articles and website. Keywords: Chainsaw, Stihl, Husqverna, Oregon, Two stroke(2T), Chain, Chain Bar guide, Carburetor, Spark plug. Competitive analysis of Stihl Chain sawsA chainsaw is a power tool which can be carried by hand and it is powered by electricity or gasoline-powered engines. Chainsaws are mainly used in various wood cutting applications like bucking, pruning and cutting of the woods. Stihl is a premium chain saw brand produce and marketed by Andreas Stihl AG & Company KG. Andreas Stihl AG & Company KG is a German manufacturing company of chain saws and handheld power equipment’s including trimmers and blower.

Stihl was founded in 1926 by Andreas Stihl. Andreas Stihl is one of the innovator of the chain saws. Stihl is the world's best-selling brand of chain saws and the only chain saw manufacturer to make its own saw chains and guide bar. Stihl uses carburetor from Chinese manufacture Zama. inc and Spark plug of NGK a Chinese manufacture. It is powered by two stroke engine. Two stroke engine provides greater efficiency and power than four stroke engine. The Chainsaw Market is expected to exceed more than US$ 745 million by 2022 at a CAGR of 1. 19% in the given forecast period (Pitzer, 2018). The Chainsaw Market report gives a clear overview of the current market including the past and the projected future of market size concerning volume, technological advances, and economic elements in the Chainsaw industry (Pitzer, 2018). According to Technavio’s analyst, the global chainsaw market is anticipated to grow at a steady rate and will post a CAGR of close to 5% during the forecast period.

The diminishing cost of gas will drive the development prospects for the worldwide cutting apparatus advertise until the finish of 2021. As per the statistical surveying data, gas cutting tools section is the biggest portion of the worldwide cutting apparatus advertise regarding the power source. Likewise, since these machines are controlled with two-stroke petroleum motors, they are profoundly subject to fills to do their capacities. It has been noticed that in the previous three years, the raw petroleum import costs have essentially dropped, which, thus, will build the offers of gas cutting tools items and drive the rate of income age in the worldwide cutting apparatus advertise. Moreover, the pattern for imports of unrefined petroleum is likewise expanding in different nations, for example, India, China, Canada, France, Germany, and the US. [image: ]As indicated by the business inquire about report, the worldwide cutting apparatus showcase is exceedingly aggressive and broadened because of the nearness of countless and universal merchants over the globe. It has been seen that these merchants are progressively going up against one another in view of elements, for example, gear wellbeing, control, weight, ergonomic plan, natural supportability, cost, and simplicity of upkeep. Besides, a few sellers are progressively concentrating on enhancing the security highlights of Chain saws, for example, the chain break alternative that empowers the administrator to stop the chain saws promptly. Below given pie chart is of market share of key competitors in chain saw industry.

Key competitors in this market are:

1. Stihl
2. Husqvarna
3. Hitachi
4. Makita tools
5. Zhejiang Zomax Garden Machinery
6. Briggs and Stratton

Other competitive vendors in the market include Blount International, Craftsman, ECHO, Sunrise Global Marketing, QVTOOLS, Remington, STANLEY Infrastructure and TTI. Indirect Competitors in this markets are:1. Circular Saw industries2. Band Saw Industries3. Axes industriesBelow is the import data of Nepal of Sawing and cutting tools in Nepal (Source: Indexmundi,2018). [image: ]Source: Indexmundi, 2018Fig: Nepal Yearly Imports in US Dollars – Sawing/Cutting off machines.

In Nepal cutting machinery imports are increasing by more than 100 percentages yearly. In recent years due to devastating earthquake there have been significant rise in import and sale of the chain saw in market. Chainsaws are the effective and less time consuming way to cut wood for building houses and fire wood. After earthquake many house in urban and rural area were destroyed. So, there is huge demand of the woods to build house. So many woodworkers opted to use chainsaws for wood cutting process. Traditional way of cutting the tree with axes and six feet saw blades requires huge manpower and its more time consuming. Porters five forces of analysis: - Porters five forces explain about business dangers that any enterprises are vulnerable because of fundamentally outside business factors. Any industry must be appealing if these five model leads any industry to accomplish a benefit (Porter, 1979). Using the Porter’s five Forces model we will try to perform the competitive analysis of Stihl in the Chainsaw industry.

Threat of new entrance

New entrance comes to the current market and endeavors to have a piece of the market share by utilizing the limit, putting weight on cost, price and rate of speculation which eventually can possibly shake the business profitability (Porter, 1979). In nepal there are many chain saw brands that are Zomax, BS, Treecut, Agrikut, Huskqverna, Hongda, Woomax, etc. Since, there are so many existing brands in Nepal therefore its not an ideal time for any new chainsaw brand to enter the market. Bargaining power of supplier: As stihl manufaccturing unit is in china and take some parts of the machinery from chinese manufacture. As we know China has the lowest labour cost and many benefits in setting up the manufacturing plant, that’s why Stihl has based its manufacturing unit in China. As in this time using the Chinese resources are the chepest way to manufacture the chain saw. Any industry with low bargaining power of suppliers always has more competitive advantage over their competitors. If the governtment policies changes in China and the raw material suppliers tend to increase prices a lot about the product then Stihl will definitely have some serious problems, it tends to increse in production cost and that will eventually led to price hike of the product.

Bargaining power of customer

At the point when a solid gathering of purchasers is available in the market, it can essentially affect an organization's item and offering choices. The most grounded control that purchasers can apply is to bring down costs, which thus impacts the benefit potential. Purchasers can likewise request higher nature of administrations or items, and increment intensity by compelling diverse organizations into value wars. These variables wind up diminishing the appeal of the business by bringing down its productivity. Dealing intensity of purchasers will be solid and ground-breaking relying upon: Qualities of a market and its conditions and the level of offers income they gives. In the event that switching costs are low for a purchaser, at that point any disappointment with a manufacture or an item will prompt loss of business as the purchaser will have the capacity to locate an other with least problem and burden.

Threats of newsubstitute

Threatsof new substitute are comparativeely low in terms of the chain saw industries because there are not many those type of machinery innovated in the market. Stihl focuses to provide their product to the wood workers or carpenters. Although there is a new kind of machinery named as alligator saw that can be used to cut branches of the tree. But it limits the user due to its functionality. Alligator saws are mostly battery powered or electricity powered. Takes those alligators saw to work in forest are kind of unpractical. So, new substitute is not going to effect the chain saw market for around 10 years.

Industrial Rivals

In this global market place, there are many competitors. Competitors are increasing gradually. In this century global market place has opened up easy way to import and export machinery. So, many multi nation companies tend to sell their product worldwide. As demand for chain saw is increasing in the global market, new brands are being introduced regularly. For example: I have been selling chain saws for past 3 years. In past three years I have sold many brands of chain saws. Since Nepalese retailors always choose profit margin in compare to brands. In year one I just had three to four brands of chainsaw to be sold at the market. But now I have more than 20 different brands of chain saw to sell. As we can see how gradually new brands are being introduced in the market. Some direct competitors for Stihl are Zhejiang Zomax Garden Machinery, BS chain saw, Husqvarna, Agrikut, Woomax, Honda, Yamaha, Super Ganapati, Super Ganesh, etc. Traditional way to cut tresses using axes and saw blades can be viewed as the indirect competitors for the chainsaw industry. As Zomax is the main competitor for the Stihl in Nepal, as Zomax provides its chainsaw with same quality build and parts in very low price.

Weakness

Zhejiang Zomax Garden Machinery:In context of Nepalese market, Zomax only has one dealer in Nepal. All product and parts are only imported by HS overseas. So, Product availability and parts are very limited in Nepalese market. As it uses chain and carburetor of the other manufacture it always has threats of bargaining power of the supplier. Stihl:In context of Nepal, Stihl weakness can be seen as its high copy duplicate products. There are many duplicate products of the Stihl available in the market. So, many customers are having trust issues on the products. Due to lots of duplicates available of the Stihl brands Stihl can suffer in terms of customer loyalty. Customers are bound to switch products. ConclusionStihl is the top sellers and market pioneer of chain saw in the chain saw industry with its robust design and quality engine.

Zomax has been competing with the Stihl to increase its market share. Customers loyalty can be seen in terms of the brand. Stihl is the customers first choice brand. Since most companies are not focused on distribution channel in chain saw industry, Stihl has strong distribution network channel throughout the world. With the competitive analysis of Stihl, it can be summarized that there are still a lot of aspects Stihl has to improve in terms of price and its duplicates in the market. If Stihl improves on its weakness, then no any company can compete with it for market leader place. Finally, it can be concluded that Stihl can improve its business all across the world by analyzing market strategies of other competitors and efficient marketing strategies to keep their customers away from duplicates.