I.Introduction
In the onset of market development, companies nowadays seek to improve their standing in the market by maximising the advantages that they acquire from the market and at the same time minimise the inherent limitations that they possess. In this regard, some companies achieve a much higher market share as compared to other players while there are some who have no choice but to wind up their operations. The former characteristic is displayed by Chow Sang Sang. The following discussions will relate the operations of the modern market and how Chow Sang Sang takes advantage of it.
II.Market Structures: Deviation from the Model of Perfect Competition
In a perfect competition, several elements have to be present. For instance, an identical product should be present with every firm taking the role as price takers. (Meese 2005) In the same manner, a perfect competition allows only a small market share for every player as the products are identical and interchangeable. This is based on the reason that all the buyers are aware of the product that these players sell along with their pricing levels. Normally, a perfect competition consist of a market that has no barriers of entry, which means that every one who wants to penetrate the market will have ample opportunity to open shop.
In reality, no company wants to stagnate themselves in a market with a perfect competition. In a profit-driven culture, staying in a perfect competition will never suffice to the needs of modern businesses. In the case of Chong Sang Sang, their grasp on the jewellery retail market is considerably strong with over 38 shops under the banner of Chow Sang Sang in Hong Kong alone. (Chow Sang Sang 2007) They have other shops in Mainland China and Macau. In addition, they control a certain number of other names in Hong Kong, namely Emphasis Jewellery and Midtown Jewellery.
Looking at this description of the company, Chow Sang Sang appears to veer off on the model of perfect competition as it uses diversification strategies to acquire a large par of the market. This is manifested in the creation of two other brand names that carry the same products of the company. As stated in their annual report, this two other stores tend to cater to other parts of the market, particularly different income brackets. To this end, the Chow Sang Sang is able to not only acquire a larger market share they have also expanded their client base to every spectrum of Hong Kong society.
III.Relationship of Market Forces and Organisational Responses
In its simplest sense, market forces and the changes that trigger it comes basically from the theory of supply and demand. In this context, one must realise that these forces makes the operations of the company interesting. (Skott 1996) It is these elements that make the crux of trading dynamic. In the case of Chow Sang Sang, being one of the leaders in the jewellery industry in Hong Kong, they have certain measures in dealing with these social forces. These organisational responses range from the company’s product to the reputation held by the organisation. For instance, the company realises that in their market, the products are essentially interchangeable. This entails attempts to establish product differentiation. (King 2002) This means that they have to show the consumers that their product is able to outperform its competitors by adding value to either its packaging or its overall contents. In the case of Chow Sang Sang, the designs of their jewellery tend to be in constant change so as to exhibit not only product differentiation but also product innovation. However, given that the major buyers and consumers of the company are those who could afford these luxuries, it is the preference of the Chow Sang Sang to establish a strong relationship with their existing clients so as to build a strong foundation for customer loyalty. (Minazzi 2003) In their case, the reputation alone of the brand name and the company ensures the consumers that they do have the top products in the market.
IV.Behaviour and Competitive Strategies of Chow Sang Sang A.Organisational Behaviour
The company, as seen in the annual report of Chow Sang Sang, the inherent goal of the company is to gain considerable finances and revenues to sustain their operations. Basically, with the operational costs as well as the amount on which the raw materials are imported and consequently crafted, it is understandable why the company places profit seeking as a top priority. This behaviour is seen in the acquisition of the company of a shop at the newly opened Disneyland in Hong Kong.
B.Competitive Strategies
As stated in the earlier parts of this paper, the company adds value to their products through differentiation schemes and establishing customer loyalty. This is manifested in the recent ad campaign seen in the website of Chow Song Song. Apparently, the new designs of the company allows for jewellery to be worn even during recreation or playing sports. In the same manner, the website also indicates that the company takes on a club for its previous and existing clients. To a certain extent, this is tantamount to the model of customer relationship management. Major players in other industries like in food retail has perfected the way of the membership card, a conduit to measure the capacity of the firm to not only forge bonds with its members but also to gather relevant and vital data that they could use for market research.
C.Role of the Hong Kong Government
The consumers in Hong Kong, particularly those that have a penchant for something shiny and new, are ensured that the products that they are purchasing are not counterfeits but actual and unequivocal products of precious metals. The government of HKSAR requires that all products of this sort acquire a stamp approval. (Chow Sang Sang 2007) This illustrates that the HKSAR government provides considerable protection for its consumers, both local and foreign.
V.Importance of International Trade, Economic Integration, and Global Markets
The accession of China, and ergo Hong Kong, to the World Trade Organisation is one of the integral points in global trade. Studies have long discussed the potential of the Asian market for western businesses. (Gao 2004) The WTO accession basically opened the doors for the liberalisation of products and services in the jewellery industry. This means that they would want to penetrate the market of Hong Kong. In the same manner, the accession of the state to the WTO afforded the company the capacity to import precious stones and metals that they need in a much lower cost. This is triggered by the similarly relaxed tariff rates that entails in the event of liberalisation.
VI.Impact of China Policies on Business Organisations
The integration of Hong Kong with the Mainland gave Chow Sang Sang the opportunity to tap the said market with minimal obstacles. However, it must also be pointed out that the integration also affected some of the policies imposed to the administrative region. (Gao 2004) For instance, the importation of diamonds regulates itself with reference to acquiring precious metals coming from the African region, i.e. conflict diamonds. Moreover, being a member of the WTO, the Hong Kong market is also open to the entry of foreign companies and similarly renowned brands in the jewellery sector. To some extent this bestows a disadvantage to Chow Sang Sang as there is the possibility of having much greater and more capable competition with reference to Hong Kong’s market share.
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