1. Industry Rivalry: Competitors have power to
threat XYZ Company. The number
of competitors will offer them product and service. All the suppliers and
buyers will look for company’s profit margin and revenue if they can not find
perfect deal anywhere else. If there
is no competition and rivalry then firms can do their business very effectively to get their
profits and increase sales for the market to stay in business.
2. Threat of New Entrants: Company business could affect the
market if new entrant coming into the business. Because it will not take much time to any competition to get good position in market if he/she
has enough knowledge and strategy about it. If they spend more money on them
to be a tough competitor then, company’s
services get down in business. Mostly company always choose fewer
competitors to work in business.
3. Suppliers: It is that how they can supply product and goods with
the minimum price. How they will offer goods and services to different companies, their aspects and if company wants
to move to different suppliers how much it cost for them. Most company depend on suppliers it is good for suppliers because company relies
on them so they have more power over them. It is bargaining power of suppliers.
4. Customers: It depends on the customer, e.g.
Company holds how many buyers and customers, what is important of each buyers, how much it would cost for them
to move different company like one to another until
get good amount of deal. It same pretty much
similar to power of suppliers. How the powerful client
and Buyers Company have. The client can hold power over that company. It is Bargaining
power of buyers.
5. Threat of substitutes: It is like how good for the consumer can switch to our competitor product.
If they find many substitute, for example
customers can find the same product and service at different place with the same price
but better quality. If company earns high amount
profit, they can down their price. The
customer can easily switch to substitute product.