Question

How I make Analyze Flower’s Farm using the Five Forces model of Michael Porter?

Answer 1

Flower's farm using the five forces model of Michael Porter can be analyzed as :-

1. Force 1 =>Threat of new entrants => How easy is it for others to enter your line of business for instance it takes a huge capital to establish a sugar Mill whereas establishing shad house for quickly growing plants Ina nursery do not require that much capital. Secondly distribution channel, if you are having an establish supply chain with supermarket then new entrant will find hard to make space for himself.

2 .Force 2 => Threat of substitutes => How easily your product can be substituted. For eg if your flower is a simple flower without any renowned fragrance then it can easily be substituted by artificial flower but if it is widely known for its fragerence then it can't be replaced or substituted with artificial one.

3 .Force 3 => Bargaining power with supplier => How strongly are you placed in negotiating with your supplier, for this bigger is the better however, if you are a small operator can you find any cooperative supplying arrangement is a matter of concern.

4 .Force 4 => Bargaining power with the buyer => Farmers in this case get a very small margin of bargaining power. Concentration of buying power in the hands of small AMT. of supermarket make the condition worse for the farmers. Also if it is possible to make cartels for selling product go for it. Also if you are producing any medicinal flower which is to be supplied to any pharma industry then you will have a higher bargaining power.

5. Force 5 => Internal rivalry amongst existing companies => While there will always be a competition among the producers but don't let this to destroy your margin of profit.