Menu

Michael Porter 6 Forces

0 Comment

ma?la?inen, 2004). Entries divide the market amongst more sellers and decrease each company’s share. The technology industry attracts vast newcomers due to its appealing customer base and fast growth. However, the newcomers are threatened by the capital needed to venture into the industry due to the expensive start up infrastructure. More so, new entrants feel threatened by the existing brands especially in the line of networking service providers like Microsoft, given that the established brands posses firm customer base that is hard to overcome. Nevertheless, the other line of technology industry that produces technology devices and gadgets like the renowned Samsung Corporation could attract entrants who could chip in and invent products that exactly befits the customers taste. Competitive rivalry The technology industry is well known for its fast growth, competition and effectiveness, and this explains why new entrants do not survive because of the intense rivalry between the existing players. However, the competition from rivals depends on the field of specialization because other companies produce technology devices while others offer networking services. … er hand, the technology industries that produce technology gadgets or devices like Sony corporation faces stiff competition because other manufacturers are gradually inventing more efficient appliances. The field of device producing technology industry is extremely competitive due to its nature of its growth, which means that customers’ tastes and trends change fast, and the concerned industry has to frequently invent up-to-date devices to catch up the pace. hence, heightening the rivalry between the existing companies. Competitive substitute The products and services provided in a particular industry usually have the same substitutes elsewhere (Ha?ma?la?inen, 2004). This substitute products and services pose a threat because they limit the ability of a firm and their prices. The technology industry is exceptional in the fact that the competition varies in different companies that specializes in technology. For instance, the information technology service providers have no much threat from substitutes because customers rely on such technology to run their lives and businesses meaning that substituting this technology becomes almost impossible. For instance, Google has positioned itself towards long term success on the internet, and there is no foreseen substitute to beat the internet so far. On the other hand, other technology companies who specializes in manufacturing of technology devices faces stiff substitution competition. For instance, a computer manufacturing company like Dell could face substitution threats from other manufacturers who could offer more outstanding products. Therefore, substitution threats in the technology industry depend on the line of specialization. Supplier bargaining power Bargaining power is the ability to influence setting of prices