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Nasi Katok: Using Porter's Five Forces Model

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2.2 Bargaining power of buyer

Another aspect of porter 's five forces model is bargaining power of buyers. The bargaining power of buyers refers to how much buyer can put pressure to the business in order to get them improve by providing better customer service, higher quality products and forcing the industry to down the prices. The bargaining power of buyer affects the seller 's competitive environment and the ability to achieve profitability in an industry. There will be a decrease in potential profit and increase in competition among seller in the industry if there is a strong buyer. On the other hand, if there is a weak buyer then the industry become less competitive and the potential profit of the seller will increase.

The buyers …show more content…

In the Five Forces analysis model, this force is based on the effect that individual and grouped customers have on business. In Nasi Katok’s case, there are several external factors that can influence the bargaining power of buyers. Firstly is the low switching cost which is one of the strong force, this is because it is easy to switch to any other Nasi Katok vendor that offers a much better quality products when there is dissatisfaction or inconvenience of the particular Nasi Katok as it is affordable to do …show more content…

This part of the Five Forces analysis model shows that new entrants have significant but not strong effect on Nasi Katok business. The threat of entry to this market may be considered as low, despite the fact that new entrants can easily compete against Nasi Katok because of the moderate costs of getting the business can be in a small amount to set up since it is only to be known in Brunei. It is also very cheap to develop the product due to Nasi Katok now grew into a trend which it can be found at various places and has now developed into a culture by the Bruneian people or business where it started growing all over Brunei, offering the bundle of rice at an inconceivably low price of a single dollar. On the other hand, it is also more easier for the new entrants to enter such market due to customer loyalty is very low as there are more likely to switch to another Nasi Katok business or other such as Ideal and Ayamku. Thus, this component of the Five Forces analysis indicates that it is very easy to the new entrants to compete against this business; hence the threat of new entrants should be a priority in Nasi Katok’s

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