Question

Please use a real business example to illustrate five forces model. You need to use your example to illustrate each aspect of five forces model.

Answer 1

Here I am taking a real business example of Samsung mobile.
Now it can be explained with the help of five forces model which includes.
Rivalry among existing competitors
Threat of new entrants.
Bargaining power of buyers.
Threat of substitute products.
Bargaining power of suppliers.
1.Rivalry among existing competitors includes the number of Competitors existing in the market, the diversity of competitors, the quality differences among the product of the competitors, the brand loyalty and the barriers to exit.
In this case the rivalry among the existing competitors include Apple Vivo Oppo and other mobile companies
2. Threat of new entrants includes economies of scale capital requirements for the diversification of business; the new and innovative technology which the new entrants adopt capture the market.
Many other Chinese companies are ready to enter the market and this is the big threat for Samsung.
3. Bargaining power of buyers includes the number of customers, the size of each customer, the difference between the competitors, the price sensitivity and the buyer's information availability.
Now everyday the two big platforms like Amazon and Flipkart create a big difference in the market of Asia. They provide a big market where consumers can easily compare the price and use the bargaining efficiency.
4. Threat of substitute products includes the number of substitute products available, the relative price performance of substitute the switching cost.
The number of substitute available same range products offered by Vivo Oppo MI and other companies.
5. Bargaining power of suppliers includes the number and the size of the suppliers, the uniqueness of each supplier's product and the company's ability to substitute.
Now retailers and wholesalers are also demanding the bargaining price to increase their profit.