Porter's Five Forces

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Five Forces Analysis

Michael Porter's Five Forces Analysis is a framework that used for industry analysis and understand the level of competition in an industry in order to develop business strategy (Tang, 2014). There are two key players in the local malt liquor market (MLM) industry of Malaysia, GAB Berhad and CBMB who have occupied 95% of the total beer and stout market shares in Malaysia (CMBB, 2015). Therefore, the competition among existing brewers are low as there are only two major brewers in the local MLM industry. The threat of new entrants is minimum as government policies and complicated tax on beers have restricted other investors in the market. The switching cost among competitors is low as the price difference between the products of competitors are minimised. This has been proved by a research, which has been done at a local shopping centre, Aeon Mahkota Cheras Store & Shopping Centre, which located in Cheras, Selangor, Malaysia. As figure11 shown, the minimum price difference between a competitor is only RM1.00 for mainstream product, and the maximum price difference is RM3.00 for Premium beer
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Figure 11: Product portfolio and price of GAB and CBMB.
The figure below shown the beer market size in Malaysia is growing continuously in term of total value (RM) and total volume (litre) since the year of 2005. As the figure below shown, Tiger beer and Carlsberg beer are occupied the highest market shares, both top brands have 35% & 34% of market shares in Malaysia respectively. On the other hand, Both Heineken and Guinness Stout, which from GAB Berhad have lead the premium beer market with 7% and 12% of the stout market share each. As a result, GAB leads the beer market shares with 58%, however, CBMB has occupied the remaining 42%. Figure 12: Beer's market size in Malaysia, 2005 - 2010 (Brand Equity, 2010).

Figure 13: Beer's market share in Malaysia (Brand Equity,

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