OXO Marketing Strategy: SWOT, Targeting, and Mix

Kitchen Gadget Industry SWOT Analysis

The kitchen gadget industry continues to experience slow growth relative to the higher-growth markets of intelligent home electronics and automated kitchen appliances. With an annual sales growth rate of 5% or less, the industry relies heavily on the ingenuity and innovation of new products (Swisher et al.). As a result, the market for gadgets tends to become commodity-like, where pricing and availability become the two most common approaches to differentiating products as they rapidly mature over time (Consumer Reports, 36–37). Manufacturers serving this market rely on a steady stream of new product innovation to grow their sales continually. With these factors in mind, the following is a brief SWOT analysis of the internal and external environments affecting the kitchen gadget industry.

Strengths of the industry include an exceptionally strong focus on research and development among many manufacturers (Swisher et al.), as well as a steady stream of start-ups that bring new innovative products to market (Jana, Walters, 71). Distribution channels are well established, and the gadget industry has seen success using e-commerce globally as a means to scale selling and reduce operating costs. A third strength is how well-defined the approaches to pricing are within existing and emerging distribution channels; the methods used to incentivize and reward channel partners are fairly well established.

Weaknesses include a very high dependence on innovation and the ability to reduce costs over time. Over time, gadgets become price-inelastic, which leads to severe price cuts to gain distribution. Another weakness is quality: when manufacturers are more focused on price than on quality, product standards tend to decline (Consumer Reports, 37).

Despite these strengths and weaknesses, there are significant opportunities to expand global sales by further developing distribution agreements throughout Asian nations and by creating a more effective e-commerce strategy for parts of Europe not yet accustomed to buying online. One of the most significant market opportunities is India, which has yet to be meaningfully addressed by any major player in this market.

The threats to this industry include tight government regulations in emerging markets, many of which are in Asia. Trading regulations and constraints on selling into India also need to be addressed by companies seeking to enter that market.

Works Cited

"Handy Gadgets for $30 or Less." Consumer Reports 12, 1997: 36–39. ProQuest. Web. 7 Dec. 2014.

Bruner, Gordon C., II, and Anand Kumar. "Gadget Lovers." Academy of Marketing Science Journal 35.3 (2007): 329–339. ProQuest. Web. 7 Dec. 2014.

Jana, Reena, and Helen Walters. "OXO Gets a Grip on New Markets." BusinessWeek, 5 Oct. 2009: 71. ProQuest. Web. 7 Dec. 2014.

Perry, Dawn. "Handiest, Smartest, Sturdiest, Snazziest, Best." Real Simple 14.5 (2013): 192. Web.

Pierson, John. "Cooking Up New Ideas in Kitchen-Tool Handles." Wall Street Journal, Eastern edition. 15 May 1991. ProQuest. Web. 7 Dec. 2014.

Swisher, Kara. "Home Economics: A Thanksgiving Day Parade of Cooking Gadgets; High-Tech Kitchen Gizmos Aim to Ease Chef's Burden; Checking the Roast by Remote." Wall Street Journal, Eastern edition. 20 Nov. 2003. ProQuest. Web. 7 Dec. 2014.