Porter's Five Forces Analysis Of Dilmaco

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1. Introduction
A sharing session was held with Mr Wan Siu Khuan, the CEO and founder of Drilmaco Pte Ltd. Mr Wan was a polytechnic graduate who turned down further education to hone his engineering skills in the industry. Over the years, with his deep understanding and broad knowledge in engineering, he discovered a business opportunity in precision machining which was not available in Singapore then. He founded Drilmaco Pte Ltd in 1997 with a few business partners and has achieved several milestones since. The company mainly provides precision milling services, specializing in deep-hole drilling and structure fabrication for the oilfield industry. In recent years, oil prices fell sharply which badly affected the company due to reduced work from major oil and gas Multinational Companies. Mr Wan took preventive and yet positive measures to keep his company going, knowing the oil price issues was out of his control and is confident the market will pick itself up again to revive his business. We will discuss further on this case study using the Michael Porter’s Five Forces analysis and as well as an analysis on market segmentation.
2. Michael Porter’s Five Forces
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It assesses how easy it is for the suppliers to drive up prices to increase the profit margins for the business. Supplier bargaining power is likely to be high when the market is dominated by a few large suppliers, there are no substitutes for the input or the switching costs from one supplier to another are high. During the time when Mr Wan discovered that there was a demand in precision machining, such services did not exist in the region thus making it an expensive service. However, as previously mentioned, Mr Wan’s company did face some competition since founding his company in 1997 and needed to increase their capacity to meet the demands from the customers. Prices may be driven down in such cases to keep the business
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