Competitive Rivalry : Supply Power, Competitor Rivalry, Threat And Substitution, And Threat Of New Entry

Porter's Five Forces is a simple but powerful tool that consist of 5 different forces to understand the competitiveness of your business environment, and for identifying your strategy's potential profitability. The five forces are degree of rivalry, threat of entry, threat of substitutions, buyer power, and supplier power. Each force is helpful in their own way to get to know your rivals a lot better and get to know what can happen in your market.

Bargaining Power of Buyers: The bargaining power of buyers is high in the department store retail industry. The volume of buyers is high, and buyers are very price sensitive in this industry. The products are not highly differentiated, and there are numerous stores that offer the same, or similar, products, giving buyers the opportunity to search for the lowest prices and information. The industry has substitutes available in the form of specialty, differentiated products and stores. This increases the power of buyers,

Power of Suppliers - This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then it holds substantial power. Here are a few reasons that suppliers might have power:

The third is the intensity of competitive rivalry this deals with the number and capability of the competitors, if you have many competitors, and they offer equally attractive products and services, then you’ll most likely have little power in the situation. If suppliers and buyers don’t get a good deal from you, they’ll go elsewhere. On the other hand, if no one else can do what you do, then you can often have tremendous strength.

The range of products of the industry is wide; as a result, customers are able to consume the same products in different stores. Therefore the threat of substitute is quite high.

A. Bargaining Power of Buyer : Bargaining power of the buyer indicates the power a buyer has to influence the firm's offer of products and services with respect to the options and prices. This puts a pressure on the firm to re-evaluate to meet the

Supplier Power: This highlights that it is easy for suppliers to rise up their prices. This is determined by the number of suppliers, the uniqueness of their product, their control over the buyer, and the cost of changing from one buyer to another. The scarcer the supplier choices you might have, and the more you need the help and that

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

The Power of Suppliers indicates how easy it is for suppliers to drive up prices. Prices can be driven up by the number of suppliers, the uniqueness of their product or service, relative size and strength of the supplier and cost of switching from one supplier to another.

The threat of new entrants refers to the threat posed by new competitors within an industry. If it is easy for new firms to enter the industry barriers to entry are low and the threat of new entrants is high. A profitable industry attracts more competitors. Economies of scale, learning curve effects and other macro factors impact the nature of an industry 's

Buyer Power is high :- Buyer have alternative channels for products and have many brands to choose are easily able to compare price due to the availability of information on internet and in supermarkets.

The power of buyers is high because this company depends of the businesses and consumers’ demand. This is because they can decide where to buy

The bargaining power of buyers is affected by the concentration and number of consumers, when buyer power is strong, they gain the power to choose between producers and ultimately equip themselves with bargaining power which then the producers will have to conform to in order to produce profit, under these conditions the buyer has the most influence in determining the price of products. Also when buyers have strong bargaining power in the exchange relationship, competition can be affected in several ways. Powerful buyers can bargain for lower prices, better

Porter’s Five Forces model is used to evaluate the degree of rivalry between competitors in a given industry through assessing the four forces that lead to this outcome. These forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products.

What is important here is the number and capability of the competitors – if there are many competitors, and they offer equally attractive products and services, then the business is most likely to have a better power in the situation. If suppliers and buyers don 't get a good deal from us, they ' will walk off elsewhere. Alternatively, if no-one else can do what we do, then we can often have tremendous strength.