when it comes to the competition within the industry, the first point jumps to my mind is the competitors within the competition, Pizza hut V.S. Mc Donal's, Apple V.S. Samsung ,Google V.S. Twitter ,Sainsbury V.S. Co-operative,but ,besides, actually there are four more factors.
Michael porter suggests that the competitiveness of a industry is based on five factors, the intensity of rivalry with the industry, which means the direct competition among the different companies within the industry. the threat of substitute, the new entrance,and the bargaining power of buyers/suppliers.
Threat of substitute:
when it comes to the best way to remember an unforgettable moment , the answer is definitely the photo album. And the film of Kodak is so famous that nearly everyone used it before. Its hard to believe that such a company has already disappeared forever. They did not realize the raise of the digital camera, they thought people will always focus on the real photo. The ignorance of the advantage of the substitute --people can choose their favorite one stead of developing all the pictures make the giant company go bankrupt finally. And now most of the customers are willing to buy the digital ,because you can make photos more attractive by adding some letters or symbols, the cameras become more joyful than before. If they realized the threat of the substitute , refused standing still, created a brand new killing product like digi-film camera then maybe kodak could launch a powerful campaign within the industry.
Threat of new entrance:
To have a Nokia phone was my dream when I was a junior school student, I even promised to my parents to get good marks in the final examinations in order to get a Nokia. Nearly everybody on the street use their NOKIA to "connect people" But Nokia finally had been acquired the Microsoft in 2013. Actually, the reason is obvious, with the development of people's living standard "connecting people" is not the only purpose of using a cell phone, we need the cell pone to make the user's life more colourful---entertainment ,for example,the powerful system of iphone---ios, we have wide range of choice to download any app in the ipod store, free novel and magazine,free game and some apps are even relevant to our daily life:maps,transport timetable,and even cookbook! Nokia did not realize the powerful effects of smartphone produced by other competitive companies and stood still in the cell phone industry, the legendary NOKIA became history in the end.
The bargaining power of buyers:
According to Porter"Buyer power refers to the ability of customers of the industry to influence the price and terms of purchase." for example, there are only two supermarkets in a small town, at first ,the price of those two supermarkets is similar, but after supermarket A raised the price, most customers choose to go shopping at supermarket B, then supermarket A shift back to the original price. Another example is in China, some bank used to charge customers for using debit card go shopping, so some customers closed their accounts and go to other banks, and now all the banks in China charge nothing for using debit card.From those two examples we can see that customers are able to influence the price and terms of purchase, that's the strong bargaining power of buyers.
The bargaining power of suppliers:
Just imagine only two suppliers can offer the significant material which is necessary for the buyers. In this situation, the strong bargaining power of suppliers is quite obvious ,because those two suppliers can change the price and the quantity they are going to produce and they even can choose the particular suppliers they want to offer this material, which means they can control the whole market if the bargaining power is pretty high.For example,Microsoft -practically dominates the market for personal computer systems, we have limited choices in price and types when we choose the computer systems.
Its easy to tell wether a industry is attractive or not by comparing the five forces when we are going to step in a new field, and when have already in this industry it an help us to remind ourselves of those possible competitiveness to prevent us from sinking into crisis and use this theory as a tool to keep moving instead of standing still .
This is a good set of blogs Snow - well written and creatively presented - you have developed your knowledge of key business concepts very well over the last few weeks and each post has been an improvement on the previous week's in many ways. I liked the Taylor post especially using quantifiable date to prove your point - also the last blog was effective in your describing different examples of Porter's forces over different industries. Your academic knowledge is sound and your reading outside the class is showing its benefits. In future you might want to consider one part of one concept we have studied and go into real depth on it to achieve higher marks.
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ReplyDeleteสล็อตออนไลน์ This is very interesting content! I have thoroughly enjoyed reading your points and have come to the conclusion that you are right about many of them. You are great.
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