In: Finance
Answer )
Porter's Five Forces model identifies and analyzes major 5 competitive forces that requires to shape a industry, and support to find industry's weaknesses and strengths. In the current case of Trov insurance, which is one of the new intiative of its own kind to provide insurance to masses with minimum value of around $1000 for all products.
The forces of the model are:
1. Competition in the industry: As the industry is an innovative type of its oen kind, current competition level is low . The profitability link to the business will attract competition in future.
2. Potential of New Entrants: A company's growth is also attracted by the force of new entrants. As the business is mainly based on technology ,so requires less time and money . The easy requirements of entry may be significantly weakened the Trov insurance position in future.
3. Power of suppliers : It is affected by the number of suppliers in the industry by supply of good or service, in the industry there is no restriction on supplier . Customers can switch supplier without involvement of cost.
4. Power of Customers: This is very crucial in the industry, the ability customers have to drive prices down. the customer can swith their provider without any cost.
5.Threat of Substitutes: Competitor substitutes that can be used in place of a company's products or services pose a threat. in such industry threat of subsitute is maximum as it doesn't involve cost .