(a) The threat of entry of New Competitors
Among the toughest competition you can see this days are in gadgets. Recently Apple Inc. launched their new smartphone called ‘Iphone 4’ . With its sophisticated feature and elegant looks it became the most wanted smartphone. However, new competitor have recently penetrated the market to take reign of Iphone 4. S such, Samsung Galaxy S2 gave the toughest competition for Iphone 4 in terms of lower price and similar feature.
(b) The Bargaining Power Supply
Powerful supplier control the price. Tenaga Nasional Berhad is the largest electricity company and is the only company that provides electricity to the people of Malaysia . The bargaining power of TNB is big as they control the price and the people in Malaysia have no choice but to pay the price that have been stated in their bills.
(c) The Bargaining Power of Customer
Buyer power is high when buyers have many choices. For example, whenever we do our grocery shopping we have the higher bargaining power because we have multiple option. For an instance, buying a shampoo products can sometime be a nuisance as they have various brands.
(d) The Threat of Substitute Products or Services
Substitute products are products with the same satisfaction. The higher the substitute threat the higher the threat the converse is also true. For example the creation of MP3, MP4, IPOD and etc have totally remove the existence of Walkman and Discman form the market. Nowadays people do not even know that these two items even existed due to the advance in technology.
(e) The Rivalry among existing firms in the industry
The threat is high when there is intense competition and the converse is also true. In Malaysia, the intense competition an be seen in the grocery industry such as GIANT and TESCO. They essentially compete on price and sometimes products. Both companies offer promotion, discounted items, gives shopping vouchers and many other thing that can attract customers.
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