Skullcandy Analysis

EXTERNAL ANALYSIS

Industry- Porter’s 5 forces

Bargaining Power of Suppliers {LOW}

1. Many suppliers
2. High differentiator- design
3. Competitors- Apple, Sony, Bose
4. Sales- USA- 70% sales
5. No high-end technology
6. No production- external production

Bargaining power of buyers {HIGH}

• Fluctuations in demand
• Buyers are price insensitive
• Profits > (2012: $139,432 / 13: $93, 134 / 14: $110, 634)
• Product: differentiated
• Alternatives available (high switching costs)
• Buyers know the product + discounts

Threats of Substitutes {Low}

• No substitutes available
• High switching costs

New Entrants {High/low}

• Entry barriers > high/low
• Market is saturated
• Advantage of differentiation

Competitor Analysis

Competitors: Sony, Sennheiser, Bose, and Dr. Dre

• Strengths

• Sony

1. Experience> various divisions
2. Brand image (PlayStation)

• Sennheiser

1. Increased wireless usage
2. Translation system

• Dr. Dre

1. Online streaming of music
2. Executive design
3. Strong financial capacity

• Bose

1. Innovation in noise cancellation
2. Serves in the military and aviation industries

• Mutual Strategies of Competitors

1. Dr. Dre

• Advertising through celebrity endorsements

2. Sony

• Accelerated execution of updated strategies

• 3 core businesses: Mobile, games, TV
• Reinforce new business for sustainable growth e.g. medical and security.

3. Bose

• To create long term value (convenience, choice for customers> digital age)

4.Sennheiser

• Selective distribution (few retail outlets > specific geographic locations)
• Consistency of quality services worldwide

PEST- USA

Political

• Intentions with war and terrorists leads to international criticism
• Increase in threat of terrorism
• Mass political economic influence national and group policy making

Economical

• GDP: $16.7 trillion
• Well-developed economy with manufacturing and service industry
• Economic crisis in 2008 effect on economy in an alarming point
• Increase in budget deflect

Social

• Ageing population
• Labor storage and rising taxes
• Cultural diversity
• Education & healthcare system is best in the world
• Increase in racial discrimination

Technological

1. Increase in mobile usage
2. Innovation/technology are corner stores for U.S economy are the
3. Nano, Bio and environmental Technology
4. Online growth
5. Competition rising from India & China

Market Overview

1. Smart headphones; health & fitness monitoring
2. Global headphone market expanded by 10%; 16% in retail
3. Sport headphone segment accounted for 4% of global shipments
4. Global headphone market will be worth $9.6 B by end of 2014.

Megatrends

• Wearable device penetration will be more than double over the next year from 6% to 13%.

INTERNAL ANALYSIS

Skull Candy Mission statement: 

 Our brand and distinctive logo symbolizes youth and rebellion, and embodies our motto, “Every revolution needs a soundtrack.” Founded on innovation, we fuse bold color schemes, loud patterns, unique materials and creative packaging with the latest audio technologies and innovative functionalities to create new and unique products. Our headphones feature our distinctive Skull candy sound and leading edge design. We offer a wide array of styles and price points and are expanding our brand into complementary audio products and accessories.