Porter's Five Forces: Pensonic Holdings Berhad Business
3.0 Industry Analysis Porter’s 5 Forces is the model to identifies and analyze the 5 competitive forces, its help companies to determine the industry strengths and weakness (Porter, 1979). The 5 forces which is competition in the industry, potential of new entrants into industry, power of suppliers, power of customers and threat of substitutes products.
Bargaining Power of Supplier Power of suppliers addresses how easily suppliers can drive up the price of goods and services. Strong bargaining power allows supplier to sell in higher priced or low quality raw materials to their buyers (Jurevicius, 2013). Pensonic core businesses are to manufacturing, importing, exporting, distribution and marketing Electrical Home Appliances to the domestic and international markets. The raw material that widely used to produce the electrical product is thermoplastics and thermosets. Suppliers cannot simply change the price as like as they want for this primary commodity to significantly affect Pensonic Holdings Berhad business. It is because Pensonic have the power to purchase from other suppliers but not necessary purchase with the same suppliers.
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The buyers that purchase from Pensonic Holding Berhad will be the wholesaler or retailer of the electrical home appliances such as Senheng and SenQ, and export to other country. This is one of the advantages for Pensonic Holding Berhad because the buyers is diversified, the buyers is very hard to set the demand for their own prices. However, the competitor of Pensonic such as Khind also produces the same products. The buyers can demand for better and low price in different supplier. Due to the statement above, the bargaining power of buyers still consider low because have many wholesaler or retailer need to purchase from Pensonic Holding Berhad even other brand selling the same
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