Scope of Business for JBL in Introducing a New Hearing Sensitive Headphone in the Australian Market

This report discusses the scope of business for JBL in introducing a new hearing sensitive headphone in the Australian market. It identifies the driving forces for customer purchase decisions and analyzes the external and internal business factors that will impact JBL's potential in the market.

Running head: INNOVATION AND MARKETING
Innovation and marketing
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Executive summary
The aim of this report is to discuss about the scope of business for JBL in introducing a new
hearing sensitive headphone in the market of Australia. In doing so, the driving forces for the
customers are being identified. In addition, the external and internal business factors are also
being identified that will be relevant in influencing the business of JBL in the Australian market.
Data from global competitiveness index and the global economy is being taken to compare the
different factors in Australia. This report concludes that with the introduction of the new
headphone in the market, JBL will be able to stay ahead in the competition over their major
competitors.

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Table of Contents
Introduction......................................................................................................................................3
Scope of the industry...................................................................................................................3
Diving force of the consumer’s purchase....................................................................................4
Macro environmental analysis.........................................................................................................4
Political factors............................................................................................................................5
Economical factors......................................................................................................................6
Socio-cultural factors...................................................................................................................7
Technological factors...................................................................................................................8
Micro environmental analysis..........................................................................................................8
Company......................................................................................................................................8
Customers....................................................................................................................................9
Competitors..................................................................................................................................9
Suppliers....................................................................................................................................10
Public.........................................................................................................................................10
Marketing intermediaries...........................................................................................................10
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

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Introduction
In the current business scenario, innovation is the key to success in the market due to the
reason that innovative products will be effective in fending off the competition. In the recent
time, the boom in the startup concepts in different business sectors is actually contributing the
race for innovation due to the fact that these startups are relying on their innovative approaches
to compete with the established players. Thus, the established players are also being forced to
initiate innovative ideas in staying relevant in the market (Gawer & Cusumano, 2014). JBL is
one of the leading music brands in the world and they are greatly known for their hearing
gadgets. However, in the recent their innovation in terms of earphones is getting stalled, which is
further reducing their market share. Thus, JBL is promoting a new brand of earphones, which are
having automatic hearing sensitivity system. This refers to the concept of controlling the sound
frequency according to the respective hearing sensitivity of the individuals. The proposed
earphones will also be able to control the volume according to the surrounding noise
automatically (Ranjan & Gan, 2015). Thus, the users will have the access to truly hands free
experiences. It can also be concluded as the incremental innovation due to the reason that
innovation is initiated over the existing products and technologies and hearing sensitive
earphones will not disrupting the existing market trend.
This report will discuss about the scope of this industry along with the major driving
forces for the purchase decisions of the target customers. In addition, the external and internal
business factors that will have impact on the potentiality of the business of new products will
also be discussed.
Scope of the industry

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It is reported that the global earphones market will touch the point of USD 15.8 billion
within 2025 and also it is reported that this industry will grow by more than 5 percent till 2025
(grandviewresearch.com, 2019). This denotes that JBL is having huge market potentiality to be
gained from this market. In addition, it should also be noted that JBL will get the benefits the
changing preferences of the customers towards having hands free experiences. This scope will
further get enhanced for JBL if the new products can be launched with competitive price points.
This is due to the fact that with the help of the competitive pricing, mass market customers can
be targeted and will contribute in increasing the market volume.
Diving force of the consumer’s purchase
One of the major driving forces for the consumer’s purchase of earphones and
headphones is the growing popularity of the online streaming apps and games. This is due to the
reason that online entertainment can be best enjoyed with using earphones and is motivating the
customers to opt for higher end earphones. In addition, another driving force is growing
availability of the latest features with the earphones (Chen, 2015). Features such as Bluetooth
connectivity are helping in enhancing the convenience of the users and this is also contributing in
increasing their demand. Lastly, demand for higher sound quality is also increasing the demand
of the premium earphones. This is due to the reason that with the improvement in the technology,
latest earphones are offering more premium sound quality and this is also attracting the potential
customers to replace their existing ones.
Macro environmental analysis
Macro environmental analysis is important in determining the challenges and
opportunities relevant with the introduction of a new product. Hence, these factors should be

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identified along with their major impacts. PEST analysis will be used in determining these
external factors.
Political factors
Political factors of Australia are relatively favorable due to the presence of stable political
regime in the country. It is noted that Australia is having democratic and open market political
system in the country and this will have favorable impact on the new product launch of JBL due
to the fact that favorable political scenario will help in having lower business issues in terms of
government of legal affairs in the country. Moreover, according to the global competitiveness
index, it is identified that Australia is having the ranking of 4 in terms of starting or initiating a
new business (theglobaleconomy.com, 2019). This is denoting the favorable conditions in the
Australian market for JBL in introducing their new products in the market. The above ranking of
Australia states that the number of complexities to be faced by JBL will be less. In addition, it is
also identified that Australia is having the ranking of 17 in terms of intellectual property rights
(weforum.org, 2019). This is also denoting that JBL will find fewer difficulties in protecting
their intellectual properties of their new product.
According to the global economy, this is the long term political risk involved in doing
business in Australia is low and the raking is also constant from the last few years. This is
denoting that JBL will have negligible amount of political risks in introducing the new products
in the market. However, one of the major negative political factors in doing business in Australia
is the corruption (McAllister, 2014). This is due to the reason that according to the corruption
index, the ranking of Australia is reducing that this is denoting that intensity of corruption is
steadily increasing. As per 2015, the corruption ranking of Australia is 79, which came down

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from 88 in 2008 (theglobaleconomy.com, 2019) Thus, the added cost and loss will be faced by
JBL due to corruption in different stages of introducing the new product in the market.
Inefficiency in the government bureaucracy will also pose challenge for JBL in their Australian
operation due to the fact that global competitive index concluded this factor as one of the major
problematic factors for doing business in Australia (weforum.org, 2019). Hence, JBL will face
the time consumption and complexities in getting the legal formalities and standards checked for
introducing the new product in the market.
Economical factors
As of 2017, the economic growth rate of Australia is 0.6 percent and it is projected that it
will grow at the rate of 2.8 percent between 2019 and 2023. Thus, JBL is having favorable
economic viability in doing business in Australia. Moreover, the growth in the economy denotes
that the purchasing power of the average Australian customers is growing and will have
favorable impact on the business of new product of JBL (Courvisanos, Jain & Mardaneh, 2016).
Household consumption rate of the country is important due to the reason that expenditure of the
customers towards the electronic gadgets is being included in the household consumption.
According to the global economy, household consumption rate of Australia as percent of their
GDP is 57.3 as of 2017 (theglobaleconomy.com, 2019). It is also identified that from 2012, the
rate of household consumption rate is steadily increasing, which denotes that JBL will find
favorable economical viability in the country in terms of their new product. The more will be the
household consumption rate, the more will be the probability for JBL in getting their new
product accepted in the market.

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However, on the other hand it is also identified that tax rate on goods and services is
fluctuating in Australia. This is due to the reason that the tax rate on the goods and services is
changing between the years of 2008 and 2015 (theglobaleconomy.com, 2019). This will pose
challenge for JBL due to the reason that increase in the tax rate will increase their end product
and reduces the potential target customer segments. Moreover, fluctuations in the tax rate will
also pose difficulty for JBL to maintain the fixed pricing for their new product. As per the global
competitiveness in index, tax rates in Australia are also considered as the second most
problematic factors of doing business in the country (weforum.org, 2019). Furthermore, the
favorable business environment in Australia along with having flexibilities of foreign direct
investments in the country will further pose challenges for JBL. This is due to the reason that the
more will be the foreign investments flow in the country, the more will be the presence of newer
competitors in the country and JBL will face more challenges in terms of larger competitors.
Socio-cultural factors
Australia is one of most socially globalized countries in the world with the ranking of
83.39 as of 2015 in terms of social globalization index. Moreover, it is also identified that the
social globalization ranking of Australia is steeply increasing from 2013 and it will only have
favorable impact on the business of JBL (theglobaleconomy.com, 2019). This is due to the
reason that socially globalized population will have more acceptances towards the innovative and
latest technological gadgets and they will also compare the quality of the products with the
global standards. Thus, the target customers of JBL will have more preferences for the higher
quality earphones, which can be offered by their new hearing sensitive earphones. It is also
reported that the online streaming industry is gaining popularity in the Australian market and this
will further complement the demand for high quality headphones. Moreover, it is also reported

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that as of 2017, the market penetration of the video streaming market is 36 percent, which
denotes that there are huge potentialities left in the country.
Technological factors
In terms of the innovation index, the scoring of Australia as of 2015 is 55.2 and it is
continuously increasing from 2011 (theglobaleconomy.com, 2019). This is denoting that
innovation is the getting traction in the country and will help JBL in having access to more
innovative ideas and factors in their business process. However, it should also be noted that this
will also pose challenges for JBL due to the reason that their competitors will also come up with
more innovative products in the market. According to the global competitiveness index,
Australia is ranked at 27 in terms of availability of latest technologies in the market
(weforum.org, 2019). This is denoting that JBL will have the access to newer technological
factors and elements in developing their new product and will enhance their long term business
viability. However, on the other hand, it should also be noted that the rapid changes and
evolution of the technology are posing challenges for JBL due to the reason that more cost is
involved in developing the technologies and this will ultimately increase the end price of the
products.
Micro environmental analysis
Company
JBL is already an established brand in the Australian market with having a wide array of
music devices. Thus, the brand identity and penetration in the market for JBL is favorable and it
will help them to push the sales of their new product. Moreover, it should be noted that JBL is
only offering music devices and thus the customer recall value for JBL as offering good sound

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quality is more (Ramaswamy & Ozcan, 2016). This will also enable them to position their new
headphones with their existing music devices. The technologically advanced product with well
penetrated brand identity of JBL will enhance the value proposition. Moreover, the long standing
branding of JBL will be the music devices have also created a sense of trustworthiness among
the customers and this will create value for them in selling the new product in the market (Gupta,
Czinkota & Melewar, 2013).
Customers
The target segment for the new hearing sensitive headphones of JBL is the age groups
between 18 and 30. This is due to the reason that these groups are more active in online
entertainment systems and they are also having the preferences for the technologically advanced
gadgets. However, with the convenience being offered by the proposed new product of JBL, the
target segment can be extended by catering to the customers above the age group of 30. This will
increase the business for JBL (Klaus & Maklan, 2013). Moreover, the target customers of JBL
are willing to pay premium for better quality and thus JBL will not face the difficulty in charging
premium for their higher end product. This will also increase the profitability for them in the
long term. With the increase in the household expenditure in Australia, the future spending of the
customers towards the higher end gadgets will probably get increased that will also create more
values for JBL (Kaura, Durga Prasad & Sharma, 2015).
Competitors
As of now, the intensity of competition for JBL will be less in terms of hearing sensitive
headphones except a few small scale brands such as Nura headphones. However, these small
scale brands are not having the brand penetration and exposure as JBL in offering their products.

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Thus, JBL is having the upper hand in terms of the intensity of competitors. However, this
advantage of them will get reduced with the introduction of the innovative products by other
global players (Chen & Miller, 2015). However, the value will be created for JBL due to their
first mover advantage in this sector.
Suppliers
JBL is already having established sets of supply chain process with proper suppliers.
Thus, in the case of the new product also, difficulties will be low for them in terms of sourcing. It
should be noted that the quality of the materials being sourced from the suppliers determines the
end product quality of JBL (Zimmer, Frohling & Schultmann, 2016). Thus, the more effective
will be the supplier management for JBL both in terms of quality and seamless process, the will
be the value proportion for them.
Public
Goodwill and word of mouth in the market regarding the particular brand also determines
the market effectiveness. This is due to the fact that if the particular brand is having negative
impression among the public, then it will be difficult for them to push the sales of their new
products irrespective of how much innovations are involved (Singh, 2013). However, in the case
of JBL, they are carrying positive impression and word of mouth among the public and will only
help in leveraging them in selling the new product.
Marketing intermediaries
Marketing intermediaries or the resellers are the touch points with the customers. Thus,
the service effectiveness of them will determine the service quality to the customers. JBL is

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traditionally following extensive distribution and is widely available through different mediums
(Cao & Li, 2015). The new product will also be available through the same channels and will
help them to cater to the larger customer segments. Hence, the value will enhanced for them by
increasing the business revenues and volumes.
Conclusion
Thus it can be concluded that the proposed innovative product for JBL will help them to
stay ahead in the competition. This report discussed about the scope of JBL in offering the new
product in the Australian market. In addition, determination of the external factors discussed in
this report helped to identify the major positive and negative factors that will have impact on the
business of JBL. It is identified that JBL will face a number of challenges and opportunities in
launching their new product in the market. On the other hand, the internal determining factors
are also being identified that will influence the value creation process of JBL. This report also
concludes that innovation will be the key for success of JBL in catering to the target customers
with their new product.

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