Five Competitive Forces Examples

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An example of an unsuccessful use of power by a buyer is when they are forced to stick with a certain supplier for products because they are the only supplier in the industry. There are probably circumstances when buyers are forced and continued to purchase from an original supplier. It is unsuccessful because suppliers can jack up prices because they know buyers don 't have much jurisdiction and say when making business deals. It is wise that buyers make sure they have multitudes of suppliers to choose from before entering a specific industry. Another of Porter 's competitive forces are substitutes, which can pose threats on existing industries. A substitute is a product or service that is able to offer similar quality as industrial…show more content…
The unique thing about Skype is that it offers an inexpensive alternative of telephone services by using internet-based connections. Instead of the traditional phone service, Skype allows users to communicate via their internet services. In addition, Skype adds webcam features so that users are able to see one another. Since Skype combines webcam features and communication features via Wi-Fi it causes competition for both telephone services and the need to travel for meetings. This idea is successful because Skype was able to offer a service that was ultimately cheaper, user friendly, and…show more content…
The last of the five competitive forces are the rivalry that takes place between existing competitors. Like any of the five competitive forces, rivalry among existing competitors will cause profitability of each company to go down. When companies compete for customers they tend to reduce prices, increase product marketability, and even improve quality of their services. There are two factors that contribute to the degrees of rivalry; the intensity and the basis of the competition. The intensity of competition can vary in many ways. For example, intensity is high when companies are either numerous or about the same size and have equal market power. When companies are equal size, it makes it really hard for companies to take over buyout one another. Another intensifying factor would be if companies both are passionate about their business and are striving to be the top competitor within the industry, this really leads to split profitability. In addition, rivalry contributes to price competition among industries. Price competition occurs when companies produce products or offer services similar to one another, this forces companies to lower cost so that they can attract new customers. When products are perishable, it also leads to companies reducing cost so that they can get rid of them. At the end of the day, rivalry can be good and bad within industries. Rivalry can push companies to work hard and be innovate with their products. On a positive note, rivalry can actually help
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