What are Porter's Five Forces in Port Services?

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Porter’s five forces interact to shape the competitive landscape facing port authorities and port service providers. The 5 forces are stated below; 1. The rivalry among existing competitors 2. The threat of new competitors 3. The potential for global substitutes 4. The bargaining power of port users 5. The bargaining of port service providers These forces will impact ports of all sizes, which drive requirements for expansion of ports, service improvement, pricing decisions, and other management actions. These forces will impact ports of all types and sizes which want their ports to expand improve in service, pricing decisions etc. 1. The rivalry among existing competitors The extent of rivalry between ports is the first force shaping …show more content…

4) Bargaining Power of Port User: The bargaining power and control over port management exercised by carriers, shippers, and tenants in varying degrees are also important forces shaping the competitive landscape of port reform. This is determined by various factors, which are outlined below. a) Concentration of Port User Power: The larger percentage of traffic in the port controlled by a user, the more is bargaining power that user has in negotiations with port management and service providers. In certain situations, the port user can be so powerful that the port literally can’t afford to lose its business. b) Impact of Changing Business Relationships: Business agreements and realignments among port users can result in powerful players which port managers and port service providers must contend with in contract negotiations. These can take the form of slot sharing arrangements, conferences, strategic alliances, mergers, and …show more content…

Some ports can be valuable players in the national economy and the loss of important customers could have a big ripple effect on employment and local income 5) Bargaining Power of Service Providers The final force shaping the competitive landscape of port reform is the bargaining power of port service providers. Various groups and operators often have the ability to exercise control over the port by threatening to cancel services. a) Experience and Capabilities of Service Providers: Experience and the capabilities which are unique that the service provider brings to the port are a factor determining the bargaining position. The greater these capabilities, the more is power the service provider has in dealing with the port. b) Participation in Facility Financing: A service provider who participates in the financing of an activity is in a better bargaining position than one who does not. c) Choke Points in the Port: Existence of Choke Points in the port which facilitate slowdowns of port operations provides power that is often employed to extract concessions from port

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