Porter’s Five Forces
Essay Preview: Porter’s Five Forces
Report this essay
Extraordinary Journeys
According to the extraordinary journeys, it shows that it is a profitable venture as it facilitates with customer maintenance strategy and retains existing customers. Then their beneficial business strategic scenario is best explained by using Porter’s-Forces.
The first force is the threat of entry that the new entrants joining the industry and influence the market. There are major barriers of entry, for instance, supply-side economies of scale, demand-side benefits of scale, customer switching costs, capital requirement, advantages independent of size, unequal access to distribution channels, government policies,
The second force is the power of suppliers which presents how suppliers can affect increasing price of the goods and services, which would lower the businesses’ profitability. The fewer suppliers there are, the more power they have.
The third force is the power of buyers. This shows the ability of consumers to drive the prices of goods and services down. The power of buyer becomes low with the small amount of purchase and when the supplier’s goods or services are very different from other competitors.
The fourth force is the threat of substitutes. The force examines how likely that the same or similar goods and services can be switching to alternative due to increase in prices. However, this force decreases both the power of supplier and the attractiveness of the market.
The last force is the rivalry among existing competitors that the primary driver is the number and capability of competitors in the given market. Those competitors that offer similar goods or services will decrease market attractiveness.
In essence, even though there should be many competitors, they have less influence in the industry. Accordingly, from Porters five competitive forces, the force that helped in the making the decision is the bargaining power.