Porter’s Five Forces Porter’s Five Forces framework is to identify the level of competition within the industry and to determine the strengths or weaknesses which can utilise to strengthen the position. The framework consist of five elements: threat of entry, bargaining power of supplier, bargaining power of buyer, threat of substitutes and industry rivalry. Forces Analysis Implication Threat of new entrant Low Threat Diversified of product There are high demand of furniture and electrical appliance. New companies would want to capture some of the market share and profit. Economies of scale Item purchase in bulk, the company able to benefit from economies of scale. Therefore, allowing them to have the advantage on cost competitive Courts offer a variety of products. If there is …show more content…
A supplier with strong bargaining power has the advantage of charging their price higher or selling low quality of the product to them. The bargaining power of suppliers will be low as there are many suppliers in the market offers similar products and this allows courts to switch to other suppliers that offer lower cost. Intensity of rivalry within industry High Threat Competitors in the industries There are quite a number of businesses involve home furnishing and electrical appliance. Market growth An increase of consumers purchasing an electrical appliance and furniture, this might attract other’s company enter into the market and seek some market share Direct competitors like Harvey Norman, Challenger, Gain City, Best Denki and indirect competitors like online shopping. All these competitors are competing with one another and are affecting the industry. There is a potential growth of the market. Therefore, many SME are opening shop in the neighbour area to cater to specific