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Exemini Porter's Competitive Forces

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Competitive Forces
Beginning with, the first element is the threat of new entrant is at the lower risk for Cap Gemini. IT Companies such as Accenture, Deloitte, and Cognizant are in the market serving the clients with various products differentiation. Operating in the information technology service industry, one requires more capital to invest in new ventures. The newer technology helps the new niche venture to kick start without being dependent on size or experience. High sunk cost from product differentiation limits the new competition from entering the industry which lowers the economies of scale. By making innovation the primary need of the client, Cap Gemini gained the attention of the customers leading towards brand building and competing globally. The high learning curve from the Cap Gemini University made more improvement in bringing higher human and intellectual capital in their business. Government regulation causes low barrier of entry to many firms. Cap Gemini has higher economies of scale due to its substantial industry size. As Cap Gemini serves in IT industry, market share can be easily being developed from having larger industry size.
Secondly, Cap Gemini poses low availability of substitutes due to more demand …show more content…

The partnership between the Alliance Company such as Sun and SAP with Cap Gemini comes with both risk and rewards. Increase in customers decreases the bargaining leverage which helps Cap Gemini to growth. Demand of integrated IT services and price war between innovative solutions may impact the sales revenue of Cap Gemini. The customer switching costs for the Cap Gemini is low as the customer requires special customization. Huge decline in IT expenditure makes exit barriers low for the Cap Gemini, which makes the weak firms to leave the market and strong firm to increase the

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