SMART IDEAS
Simply smart
Michael Porter's Five Forces Analysis
1. THREATS OF NEW ENTRANTS
With the globalized market that we have today and the high levels of competition in each business, the threats of having new entrant business as competition es very likely for our business. Of course, there are barriers that this new entrats have to trascend, but if they enter to the market i'm in, i'm going to have to compete with them. Also, the product differentiation is very important in this part, becouse each business is different and gives a different experience for the customer, even so the products are very similar, the customer loyalty is crucial also, becouse there is a lot of customers that doesn't mind about the brand and changes without mistery or concern.
2. THREATS OF SUBSTITUTE PRODUCTS OR SERVICES
As long comes the competition, this factor brings with it the substitute products or services that can harm in a pretty bad way my business. But, as our business is an event manager, is very difficult to copy in the exact same way this tipe of service becouse, it is true that there is a lot of competition in this field and there is a lot of firms that are entering into this market, but each one of theme brings a very different kind of service and experience to the customer. Also, factor like the customer's propensity to substitues, buyer's switching costs, perceived level of product differentiation, number of substitute products available in the market and quality depreciation are very taken in count when there are subtitute products or services that can harm me, and we can see that seeing or achieving this factor are very difficult in the current market becouse the great variety of businees and also the great competition in it.
3. BERGAINING POWER OF CUSTOMERS
In this part, the sensibility that the customers have to price changes and the hability that the buyers have to put the firm in the edge with their bergaining power is very important. If my customer haves a larger or a shorter budget or input, that is going to decide wheter if it affects me or my competition, becouse we're offering them a low budget service so they can have a pretty decent event, but also if they are having a better input, maybe they are going to go with the competition.
4. BERGAINING POWER OF SUPPLIERS
The suppliers are a crucial part for any firm in this world, becouse without them we couldn't bring the service to our customers. Also, they have a great power over the firm we're managing, especially when the firm doesn't count with substitutes, becouse they can decide and put the negotiation terms for providing us with what we need. The factors that are very important in this part are: Degree of diferentiation with inputs, presence of subtitute inputs, strenght of distribution channel, employee solidarity, supplier switching costs relative to firm switching costs and supplier competition.
5. BERGAINING POWER OF BUYERS
The buyers are a crucial part of our business, becouse we depende of them, so we have to take a great care for them. As our business offers the best price in the market and also a very good quality, we hope to count on them and gain a crucial power over them.