How to use porter s five forces model

The second service targets the enticement of new customers while also catering to loyal customers. This service would consist of

The power of buyers in the industry varies at different levels depending on the field. For pharmaceutical drug companies, which have thousands of patients, customers have lower price sensitivity as they are rarely able to refuse the treatments they need and they have low bargaining leverage due to commonly lack of information as well as knowledge on the drugs. For biotech firms that distribute specialized products to the government and hospitals, their customers actually have more of a bargaining power due to being the sole consumer sources

Goods and services are both areas of operations, this means that they will change the state of any input into output. In order to achieve this they will need to have a transformation process according to the type of service or goods they have to offer this is all part of satisfying customer needs.

• getting or using services – such as banking and insurance services, services provided by government departments, transport or telecommunication services, professional services like those provided by lawyers, doctors or tradespeople, services provided by restaurants, shops or entertainment venues.

SERVICES ID: STORE_JOB- -STORE PROVIDING SERVICES: Having employees that can do their job and extra is a great thing, for example they can not only sell items they can install them and put them together.

The new service economy has positive and negative aspects. The United States labor was once based on agriculture, then manufacturing and has now turned into an economy based on services (Hodson & Sullivan, 2008). Over the years, Americans have gained more capital and with that capital services such as education, health and entertainment have increased. (Worldbank, n.d.) Because service jobs are not based on the use of machines like manufacturing, jobs are continuing to grow in the

Offer a wide range of services (optional). This could give you a distinct advantage over those who offer only one or two types of services. Many clients prefer to

For difficult to serve small customers alternate and cost effective means of ordering, transporting and fulfilling the orders should be sought.

Tangible goods, or rather manufactured goods, have been the dominant medium of exchange for centuries. However, recent decades have proved that it is no longer the case as there has been a prevalence of being service oriented (Vargo and Lusch, 2004:1-2). Services, as defined by Vargo and Lusch (2004), are  “the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself (p.2).” Utilizing services gives businesses an edge, a competitive advantage, particularly in an evolving competitive market, something which Metalfrio is definitely part of (Vargo and Lusch, 2004:9).  Those businesses that learn to adapt tend to do well. In addition, Vargo and Lusch (2004) write this shift to services is also a shift from producer perspective to a customer perspective (p.2). Thus, it leads to more of a collaborative effort where co-creation leads to adding value to the service rather than a product having value (Vargo and Lusch, 2004:6). Also, customers rather develop relationships with those that can provide a range of related services over an extended period of time, thus allowing businesses retain their clients for the long term (Vargo and Lusch, 2004:13). Overall, service oriented marketing is a direction that businesses should be headed towards to ensure that they can remain relevant and competitive in the

•Oligopoly: This is an industry with very little firms in the market. If they conspire, they weaken output and raise profits the way a monopoly would and should do. For example the mobile phone industry is an oligopoly what with so many companies for example Apple, LG and Samsung all competing together. Supermarkets are oligopoly’s as they make supernormal profits as well.

If the business is a monopolist, then it has price-setting power. At the other extreme, if a firm

The service industry answers the call of capitalism in that people are still purchasing and selling. But the industry deviates from the traditional consumer-driven practices because the consumer only uses the service of a product, but does not attain ownership of the product. This shift from product consumption to the selling of service addresses and answers the challenge that human welfare is best served by improving the quality and flow of desired services delivered, rather than by merely increasing the total dollar flow?(Hawkins and Lovins 1999). The environmental benefit of an industrial service economy lies in the fact that it is ?regenerative rather than depletive, one whose products ?work within cradle to cradle lifecycles rather than cradle to grave cycles?? (Brown).

The bargaining power of buyers: Buyers have more control over an industry than one might think. They want lower prices, higher quality, and more services and this makes the competitors play against each other. The profitability suffers as each competitor tries to make their product or service better (Dess, p. 54). McDonald’s has a $1.00 menu as does Burger King and Wendy’s. Each time I go into either of them there is a better item added to the $1.00 menu. For instance, McDonald’s has the scrumptious Double Cheeseburger and Wendy’s has the

In this case some big companies dominate the whole industry and as a result the small companies

Competition: As time goes on firms drop out until no one is producing the product.