The backlash throughout the Muslim world against a series of Danish cartoons caricaturing the Prophet Muhammad is having a severe impact on prominent Danish products. The region is buzzing with text messages and e-mails promoting the boycott. Concerned citizens have been checking supermarkets for Danish goods and then asking for them to be removed. Islamic tradition explicitly prohibits any depiction of Allah and the Prophet.
As this incident shows, consumers really do have a very high power to bring businesses to their knees once their wrath has been aroused, since the buyers in this case are Muslims and they account for an estimated population of 1.2 billion people around the world. According to Porter's 5 model, buyers can posses a credible backward integration threat, by buying products from other competitors. Please note that most of the Danish products in the market are dairy products and considered as fast moving consumer goods where substituting those goods are easy, no switching costs are incurred and are standardized products. This will cause a very large decrease in their sales, if their primary consumers are in the Gulf/middle East area.
In addition, regarding the customer interface business components, there are couple of elements that have been affected which are ‘Information and Insight’ and ‘Relationship Dynamics’. The first element had a high negative impact on the products, whereas a lot of supermarkets have removed all Danish products from their shelves so it cannot loose its consumers and to show them that they support their boycott. In case the stores kept the Danish products on shelves, then the boycott will also affect the stores with severe losses as this is what happened with a couple of stores. Stores have also given out flyers specifying that Danish products are no more in their stores, taking into a concern that the media plays a crucial role in the business. The second element ‘Relationship Dynamics’, shows that initially the consumers perceived Danish products as high quality products although they are considered expensive compared to local products, but those products were in high demand. Now after the boycott, the relationship between consumers and producers is a pure hate relationship. So any product that is imported from, or produced in Denmark is a considered as an unwanted product.
As this incident shows, consumers really do have a very high power to bring businesses to their knees once their wrath has been aroused, since the buyers in this case are Muslims and they account for an estimated population of 1.2 billion people around the world. According to Porter's 5 model, buyers can posses a credible backward integration threat, by buying products from other competitors. Please note that most of the Danish products in the market are dairy products and considered as fast moving consumer goods where substituting those goods are easy, no switching costs are incurred and are standardized products. This will cause a very large decrease in their sales, if their primary consumers are in the Gulf/middle East area.
In addition, regarding the customer interface business components, there are couple of elements that have been affected which are ‘Information and Insight’ and ‘Relationship Dynamics’. The first element had a high negative impact on the products, whereas a lot of supermarkets have removed all Danish products from their shelves so it cannot loose its consumers and to show them that they support their boycott. In case the stores kept the Danish products on shelves, then the boycott will also affect the stores with severe losses as this is what happened with a couple of stores. Stores have also given out flyers specifying that Danish products are no more in their stores, taking into a concern that the media plays a crucial role in the business. The second element ‘Relationship Dynamics’, shows that initially the consumers perceived Danish products as high quality products although they are considered expensive compared to local products, but those products were in high demand. Now after the boycott, the relationship between consumers and producers is a pure hate relationship. So any product that is imported from, or produced in Denmark is a considered as an unwanted product.

1 Comments:
That's pretty silly, about those cartoons. Crazy, even...
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