Jysk Porter 5 Forces
For the external analysis I will do a Porter 5-Force analysis on the Micro environment of JYSK on the Chinese market.
First I want to have a look at the Industry competitors, so the rivalry. If we take a look on the Chinese market, we can see that there is already a fierce competition going on the market. Domestic and foreign retailers like IKEA or Wal-Mart have already successful penetrated the market. The number will increase constantly, because everybody wants a piece of the cake. If we look at the entry market for JYSK, that would be Shanghai, so there is already a large furniture center. There is no concept like JYSK so far, but most of the segments they serve are already covered, like mattresses. The Chinese market suffers from plagiarism; there is no uniqueness due to that.
Next I want to have a look at the potential entrants. In general there are no big entry barriers; it’s easy to penetrate the market. Costs are quiet low. The sorts of concepts you can offer are limited, there is no franchise retail chain on the market yet. IKEA is similar, but different because it’s a self-service shop. The advantage of being a famous European chain is no advantage in china any more, Chinese are brand fixed, but they don’t know European brands on the market that much. For the potential entrants there is to mention, that almost the whole world wants to join the Chinese market and there is and there will be even more beginners.
Next I want to have a look at the substitutes. Substitutes do not exist due to the uniqueness of the product-level. It’s almost impossible to substitute a mattress, of course you can use an air mattress, but the possible substitutes are not worth to be mentioned. The big problem is the Chinese patent system, because there is none, the market suffers from plagiarism.
Next I want to have a look at the buyers and there Power. The bargaining power of furniture buyers in china is pretty low. Furniture creates less significance for buying ambitions.
First I want to have a look at the Industry competitors, so the rivalry. If we take a look on the Chinese market, we can see that there is already a fierce competition going on the market. Domestic and foreign retailers like IKEA or Wal-Mart have already successful penetrated the market. The number will increase constantly, because everybody wants a piece of the cake. If we look at the entry market for JYSK, that would be Shanghai, so there is already a large furniture center. There is no concept like JYSK so far, but most of the segments they serve are already covered, like mattresses. The Chinese market suffers from plagiarism; there is no uniqueness due to that.
Next I want to have a look at the potential entrants. In general there are no big entry barriers; it’s easy to penetrate the market. Costs are quiet low. The sorts of concepts you can offer are limited, there is no franchise retail chain on the market yet. IKEA is similar, but different because it’s a self-service shop. The advantage of being a famous European chain is no advantage in china any more, Chinese are brand fixed, but they don’t know European brands on the market that much. For the potential entrants there is to mention, that almost the whole world wants to join the Chinese market and there is and there will be even more beginners.
Next I want to have a look at the substitutes. Substitutes do not exist due to the uniqueness of the product-level. It’s almost impossible to substitute a mattress, of course you can use an air mattress, but the possible substitutes are not worth to be mentioned. The big problem is the Chinese patent system, because there is none, the market suffers from plagiarism.
Next I want to have a look at the buyers and there Power. The bargaining power of furniture buyers in china is pretty low. Furniture creates less significance for buying ambitions.