Question

Using Porter's Five Forces , conduct a strategic analysis of an industry that you are familiar with. From your analysis, highlight two key facts which would help to shape your strategy as a new entrant in your chosen industry.

Answer 1

Answer:

I would like to take an example of an industry which is widely known and has an effective global presence in the current era of electronic devices across the globe i.e. Xiaomi Corporation. In order to start with the strategic analysis of the Xiaomi corporation, porters five forces are derived as below.

1. Threat towards the new entrants in the market

It’s not easy to be able to achieve economically for any other organization in such a quick span of time, towards what Xiaomi Corporation has done so far. People who have been having a production of a bulk units to have the advantage of a lower cost, resulting to which it becomes a costlier production cost for the new entrants. Which eventually results in making the threat towards the new entrants in the market weaker.

2. The power to bargain with the suppliers

Xiaomi Corporation have been immense number of suppliers in the industry as compared to other organizations / rivals. Which clearly means that the suppliers have very limited control in terms of prices which eventually makes the bargaining a great power for Xiaomi Corporation.

3. Bargaining power of the buyer

As there are not much threat towards the buyers to be able to integrate a bit backwards, which eventually ends up resulting bargaining risk of the buyer a lot weaker in the industry.

4. Threat towards any substitute product

Xiaomi Corporation being one of the very well widespread organization in its segment, its quite obvious that they will be prone towards their products and services in line with the latest technology as well as the market trends. In case of Xiaomi Corporation, it’s quite prepared with this threat of having a substitute product in market and should not bother them much.

5. Competitive organizations in the market (Rivalries)

This is one of the major things Xiaomi Corporation having been working towards. As in the current era of technology its really important to have a top-notch product at the same time your product should stand out in the market. Xiaomi Corporation has a very competitive strategy aligned towards the same and keeping themselves conscious regarding the same would not be able to eliminate this threat but at least be able to mitigate the risk over time for Xiaomi Corporation for sure.

The tow major factors which would help to shape my strategy with respect two new entrant would include the hold on the current suppliers & buyers and the cost effectiveness rations offered towards the products present in the market.