Summary Of Rivalry In The B2C Industry

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CB2505 Individual Assignment 1 L03 53432166 LEE Mu Fan 1. Analysis of online retailing (B2C) industry (1)Rivalry among existing firms in the industry-medium level The intensity of rivalry in the B2C market is in a medium level for two reasons. First, competitors are numerous because the Internet widens the geographic market, which lead to the increasing number of competitors. The second reason is the growing market. According to yStats, the market development, especially for Asia, continues to rise by exceeding 3 billion people in 2015. With an expanding market size, it is expected that company will concentrate on attracting new customers instead of seizing competitors’ market share. In other words, the direct attack among the existing firms will be lowered to some extent. (2) Threat of New Entry-high level The threat of the new entrants in the B2C…show more content…
First, People who go to the B2C website are seeking for products with particular functions, which means that customers may not ask for a specific brand. In other words, substitutes are available for B2C companies to consider. Second, the switching cost for B2C companies to change to other product suppliers is much lower than physical store because the websites just need to change the pictures and description but physical stores have to re-decorate the whole design. (4) Bargaining Power of Buyers-medium level The bargaining power of buyers in the B2C market is in a low level for three reasons. First, the individual customers are large because of the Internet effect. So they have little bargaining power with the large B2C websites. Second, the units purchased by the individual customers each time tend to be small. Third, the individual customer can easily increase the bargaining power by closing the current website and turn to another one, implying that the switching cost is very low. (5) Substitute Products/Services-high

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