It will also weaken the company’s position. the lesser money and resources are required to enter into any industry, the higher there will be new competitors and be an effective competitor.Products substitute available in the market.The potential factors that made customer shift to substitutes are as follows: For example, using Aquafina in substitution of tap water, Pepsi in alternative of Coca Cola. If the goods and services are not up to the standard, consumers can use substitutes and alternatives that do not need any extra effort and do not make a major difference. Customer loyalty to established brands.Barriers to entry that includes copy rights and patents. following factors is describing the level of threat to new entrants: Therefore, it is necessary to block the new entrants in the industry. However, the new entrants will eventually cause decrease in overall industry profits. as the industry have high profits, many new entrants will try to enter into the market.These five forces includes three forces from horizontal competition and two forces from vertical competition. These forces refers to micro environment and the company ability to serve its customers and make a profit.
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