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Essay: Intense competition among industry rivals

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  • Subject area(s): Business essays
  • Reading time: 2 minutes
  • Price: Free download
  • Published: 11 October 2015*
  • File format: Text
  • Words: 350 (approx)
  • Number of pages: 2 (approx)

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Currently, there are numerous rubber glove manufacturers in Malaysia. Latexx Partners is actually facing great competitive pressure from the powerful competitors that has gained significant market share in the rubber gloves industry such as Top Glove, Hartalega, Kossan and Supermaxx Manufacturing. In essence, they will compete aggressively over the features, quality and price of their manufactured products. Thus, buyers will have strong bargaining power and it is quite hard for Latexx to make its products to stand out from all of the other rubber gloves that are available in the market.
Regulatory requirements of local and foreign governments
In fact, the medical and surgical gloves are considered as medical devices. Thus, these types of specialized gloves must comply the legislation set by the Malaysia Ministry of Health to safeguard the interest of public health and safety. Furthermore, Latexx has to conform to various standards set by the foreign countries in order to fulfill the demands of export market. For instance, a standard acceptable quality level (AQL) rule has set by the US Food and Drug Administration for all the gloves that enter the US market. Moreover, in some parts of foreign countries such as USA, it had also mandated to use only nitrile gloves due to health concerns. Thus, Latexx needs to aware of the regulatory requirements that set by both of the local and foreign countries from time to time.
Volatility risk of commodity price
The natural latex is the major manufacturing cost component for the rubber gloves. However, the cost of natural latex is usually linked to its price fluctuations in the global commodity market. Hence, the profit margin of rubber glove manufacturers is always affected by the volatility of latex price.
Currency fluctuation
Latexx’s gloves are distributed and sold to more than 300 customers in 80 countries. Thus, the unfavorable currency exchange rate fluctuations will definitely bring negative impact on the financial performance of Latexx when the receipts and payments are denominated in foreign currencies. For instance, the short-term depreciation of US$ will also erode the profit margin of Latexx when its products are exported the foreign market.

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