Porter Force 5
Analyze Industry Structure
In the analysis of the structure of the industry, competitive forces in industry analysis can be developed such as:
1. Threat of new entrants.
In every industry there are problems for companies to face such as the entry of new competitor in the same industry. This is because it can lessen the market share of the company. These new companies use different approaches to attract the customers like they might offer cheap rates as compared to the well reputed brands for the same standard of product to break their customer opinions and to increase their own sales. Usually new entrants offer cheaper products than the established one. For example, in the case of Pizza Hut, it could be a threat for the company. If it will happen in Pizza Hut then there is possibility that Pizza Hut may lose their customers and the customers may shift towards the new entrants. However, for the self-defense of Pizza Hut against the new entrants, it is essential that company should be prepared and should make measures to oppose this kind of threat utilized by new companies in the food industry. By following these planning, Pizza Hut can be safe from new entrants.
2. Bargaining power of suppliers
It can be explain that the authority of the persons who supplying raw materials to an organization has the ability to control the cost and supply of the raw materials which they are providing to the organizations. For example, Pizza Hut is also using raw material in creating the products and there are lots of suppliers who are willing to supply those products. Therefore, Pizza Hut can have lots of options in order to lessen the power from supplied to the company such as replacing it with substitutes that are cheaper than the cost of the suppliers. Other than that, they can purchase raw materials in bulk so that the cost will be much cheaper. Besides that, if the company thinks that the suppliers are over-charging then they can change to another supplier which is offering
In the analysis of the structure of the industry, competitive forces in industry analysis can be developed such as:
1. Threat of new entrants.
In every industry there are problems for companies to face such as the entry of new competitor in the same industry. This is because it can lessen the market share of the company. These new companies use different approaches to attract the customers like they might offer cheap rates as compared to the well reputed brands for the same standard of product to break their customer opinions and to increase their own sales. Usually new entrants offer cheaper products than the established one. For example, in the case of Pizza Hut, it could be a threat for the company. If it will happen in Pizza Hut then there is possibility that Pizza Hut may lose their customers and the customers may shift towards the new entrants. However, for the self-defense of Pizza Hut against the new entrants, it is essential that company should be prepared and should make measures to oppose this kind of threat utilized by new companies in the food industry. By following these planning, Pizza Hut can be safe from new entrants.
2. Bargaining power of suppliers
It can be explain that the authority of the persons who supplying raw materials to an organization has the ability to control the cost and supply of the raw materials which they are providing to the organizations. For example, Pizza Hut is also using raw material in creating the products and there are lots of suppliers who are willing to supply those products. Therefore, Pizza Hut can have lots of options in order to lessen the power from supplied to the company such as replacing it with substitutes that are cheaper than the cost of the suppliers. Other than that, they can purchase raw materials in bulk so that the cost will be much cheaper. Besides that, if the company thinks that the suppliers are over-charging then they can change to another supplier which is offering