The five basic forces are: (1) Bargaining Power of Customers. This affects the profitability of a given industry. The various factors like the ease with which customers can switch to the competitor’s products, the price sensitivity of the customers, the volume which buyers command are deciding the bargaining power of customers. (2) Bargaining Power of Suppliers : This includes the concentration of suppliers to an industry compared to the concentration of firms in that industry, the ease of switching away from the industry, the availability of substitute products, the price sensitivity of firms in the industry to input prices, and the ability of suppliers to integrate downwards. (3) Threat of New Entrants : The factors required to face such threat includes high capital investment, a steep long learning curve, high brand equity for existing players, tight government regulation, high switching costs, and constraints in access to resources.
In international marketing, every country has different laws and regulations; this international marketing depends on the customer buying habits, their tastes and culture. It is important to understanding the difference between the domestic and international marketing for Planet Preserve business. In an international market, there are a large number of compotators of Planet Preserve products. Here the level of competitors in foreign market is more then in domestics region. And it is complex to make the Planet Preserve product the bestselling product in international market.
This is the very notion that dictates budgetary control practices via the medium of Capital Markets. Asset prices have become so sensitive to information and inferences based off policies and budgets that companies who took part in leveraged growth have to choose between honest growth where budgetary control is being used as intended and face the probability that their market capitalization will decimate, or keep the dream alive a little longer and use budgetary control as a communicative tool to paint a rosy facade. Sadly, the latter is the case
The focal firm performance is affected by external environment (industry environment and general external environment) in the competitive advantages. The industry environment has the direct effect on the focal firm in the five competitive forces to assess industry attractiveness and to earn above-average profits. The Porter’s Five Forces model focus on the screening and interpreting of threats in the industry environment for corporate level strategic choice, they have direct affect to the average profitability of firms because of the products price, the costs of production and the costs of entry in the industry. If there are high barriers of all threats in the industry, the focal firm will earn expect normal profits that earn its cost of capital.
Suppliers may encounter negative effects as a consequent of increased product and service prices, as well as their quality, as asserted by Fernie and Sparks (2004). Karagiannopoulos et al (2005) believes that some key factors affecting the bargaining power of suppliers are suppliers concentration in relation to the firm’s concentration, competition among suppliers, and level of input differentiation, among other factors. A good example is when a company invest a vast capital amount in the country, it is entitled to more favourable prices with exclusive discounts, something that other smaller competing companies are not entitled to (Ritz, 2005). Hence, Tesco has a high bargaining power that increased in proportion to its huge investment. If a particular supplier is charging too much, Tesco can consider switch to another supplier.
2.2 Threats Intense competition Change in testes Undeveloped market Lower economy Prone online platform Mature market Volatile costs 3 Pest analysis of Egypt PEST analysis refers analyzing about the political, economic, social and technological factors of a country that is selected for new international business expansion (Fine, 2009). In this PEST analysis, I will give a short overview of political, economic, social and technological factors of Egypt. Figure: PEST Analysis 3.1 Political factor Political factors are the combination of tax rate, political stability, tariff, laws etc. (Fine, 2009). These types of elements of political factor ha larger impact on retail organization which is going to be formed.
3- The effect of political and economic factors on business: Political factors that affect businesses include new legislation such as the national minimum wage and setting TAX rates such as VAT or corporation tax. As tax can be affected by how the economy of the state is ,as you can see when the economy is collapsing the tax rates are usually increased in order to gain what is lost by the collapse . Economic factors that affect firms are inflation and unemployment, interest rates and exchange rates if importing or exporting goods abroad. (http://www.bbc.co.uk/bitesize/higher/business_management/business_enterprise/business_contemporary_society/revision/14/) 4- Current factors which might affect businesses now and in the future: Nowadays, The problem of Qatar with most gulf countries influenced on business, those countries stopped the import exchange which made the state of Qatar to make a deal with Iran and Turkey to get imports at more expensive price, Also Trump when he said that “ Jerusalem is a capital of Israel “ it affected the economy as many of the countries who opposed this stopped interacting with the US market which caused them to have a to lose some of their financial customers (B2B) . In the future, The main factors are the global wars will impact on the world businesses as well as cutting off the relations of countries and natural disasters,
FIVE MAJOR TYPES OF EXTERNAL FORCES ECONOMICS FORCES: Economic factors have a direct impact on the potential attractiveness of various strategies. This key external factors can over time and by industry. Relationships with suppliers or distributors are often critical success factor.Other variables commonly used include market share, competing products, world economies,foreign affiliates, proprietary and key account advantages, price competitiveness, technological advancements, population shifts, interest rates, and pollution For example, as interest rates rise, then funds needed for capital expansion become more costly or unavailable. Also, as interest rates rise, discretionary income declines, and the demand for discretionary goods falls.
Theoretical Framework Chapter two introduces the theories that are relevant to the purpose of this thesis. The following theories that are presented below are: consumer preferences, target group, brand, advertisement and sponsorship. Finally, the chapter ends with the analysis model and hypothesis. 2.1 Consumer Preferences The consumer market amounts to a total of 6.3 billion people, and thus there is great demand for an enormous variety of goods and services, especially as consumers differ from one another in that of age, gender, income, education level, and tastes. Moreover, the relationships between different consumers, as well as their contact with other elements of the world surroundings, affect their choice of products, services, and
The economic factor that faced by KPSB is how their business and company carries on its operation in the future. The trade rates influence the organization by influencing the expense of foreign made and traded products because KPSB interact with other countrys. Moreover, the interest rates winning in the economy impact the expense of capital accessible to the association and henceforth assume a vital part in the extension and development of the KPSB organization. Social factors of KPSB is population and its growth rate, health conciousness and safety awareness and also the company plays an important role to make sure that the quality of the construction work done. This social factors help KPSB company to understand the help associations comprehend the flow of existing and developing potential markets