Poters Five Forces Model in E-Commerce Essay - 1312 Words

FIVE COMPETITIVE FORCES OF INDUSTRY Michael Porter has postulated that the intensity of competition in an industry is determined by its underlying economic structure1. And he further contends as we saw above, that the industry structure is shaped by five basic competitive forces: the threat of new entrances into the industry, the bargaining power of suppliers to the industry, the threat of substitute products or services, the bargaining power of customers or buyers, and the Rivalry among Existing Firms. The figure shows these competitive forces. The threat of substitute products The existence of close substitute products increases the propensity of customers to switch to alternatives in response to price increases (high elasticity†¦show more content†¦The ability of customers to put the firm under pressure and it also affects the customers sensitivity to price changes. ï‚ § buyer concentration to firm concentration ratio ï‚ § bargaining leverage, particularly in industries with high fixed costs ï‚ § buyer volume ï‚ § buyer switching costs relative to firm switching costs ï‚ § buyer information availability ï‚ § ability to backward integrate ï‚ § availability of existing substitute products ï‚ § buyer price sensitivity ï‚ § differential advantage (uniqueness) of industry products ï‚ § RFM Analysis The bargaining power of suppliers Also described as market of inputs. Suppliers of raw materials, components, and services (such as expertise) to the firm can be a source of power over the firm. Suppliers may refuse to work with the firm, or e.g. charge excessively high prices for unique resources. ï‚ § supplier switching costs relative to firm switching costs ï‚ § degree of differentiation of inputs ï‚ § presence of substitute inputs ï‚ § supplier concentration to firm concentration ratio ï‚ § threat of forward integration by suppliers relative to the threat of backward integration by firmsShow MoreRelatedPoters Five Forces Model E-Commerce1348 Words   |  6 PagesFIVE COMPETITIVE FORCES OF INDUSTRY Michael Porter has postulated that the intensity of competition in an industry is determined by its underlying economic structure1. And he further contends as we saw above, that the industry structure is shaped by five basic competitive forces: the threat of new entrances into the industry, the bargaining power of suppliers to the industry, the threat of substitute products or services, the bargaining power of customers or buyers, and the Rivalry among ExistingRead MoreRole of Information Systems in Small Scale ‘Ready to Eat’ Food Business3150 Words   |  13 Pagescould be used to support ‘Ready to Eat’ 2 2. (a) Business Functions and the role of Information systems in a business 3 (b) Need of transaction Processing system (TPS) in a Business: 4 3. (a) Poter’s Competitive Forces Model: 4 (b) Role of Information System to counteract the competitive forces: 5 4. (a) Information Requirements of ‘Ready to Eat’ 6 (b) Business function to be computerised 6 5). Use of computer networks to improve collaboration and among key stakeholders 7 6. The managementRead MoreBusiness Analysis : Qantas And Jetstar Essay2646 Words   |  11 Pagescorporate strategy : Marketing planning and marketing audit by Qantas would help this airline in getting the information have a better understanding of the demands of the customers, market demand, analysis of competitors in the market, dealers and other forces present in the international market. A formal marketing planning of the Qantas airline will help it in forecasting the market situations that would help it in developing diversified strategies for the future. The information that are obtained throughRead MoreBsnl Project3862 Words   |  16 PagesMUNLINA SATPATHY (ROLL NO.:-11202137) Contents * Introduction * Market Position Of BSNL * Competitors Of BSNL * Objective Of BSNL * Marketing Strategy Of BSNL * Application Of Porter’s Generic Strategy * Porter’s Five Forces Related To BSNL * SWOT Analysis Of BSNL * BCG Matrix Of BSNL * Value Chain Delivery * Customer Satisfaction * Business Environment * Brand Equity * Market Research Questionnaire Introduction Bharat Sanchar Nigam