In the business environment, It is important to take into consideration in the strategic planning of the company. Strategic planning will not succeed. Without an analysis of the competitive environment of violence. And industry or target market For the five force analysis will help to understand structural trends and various forces. Which will affect their ability to make profits in the industry or target market. It helps to know the strengths and weaknesses associated with the industry and competitors. Visualize trends and threats in the industry. And that the industry will grow or weaken the impact of the five mentioned is one. The bargaining power of suppliers or suppliers - number of sellers or raw materials available. If oligopoly The bargaining power of suppliers is high. Influence over buyers in terms of price, quality and other trading conditions - the level of integration of suppliers. If the seller has gathered bargaining power is higher - the amount of raw material resources available. If there is less material Bargaining power is higher - the differences and similarities of the raw material. If the material is very different. Bargaining power for higher second. Bargaining power of buyers - the purchase amount. If the buyer ordering in larger quantities. Shall have the power to negotiate higher - in which customers receive information about products and vendors. If customers have more information It is negotiable - loyalty to the brand - the difficulty in gathering together a group of buyers. If customers gathered to have high bargaining power - the ability of buyers to the merger to the back (Backward Integretion) is that if customers can produce their own. Bargaining power is high - the cost of switching to other people's products (Switching Costs) or use a competitor's product, customers require high switching costs. Bargaining power of customers is low 3. Restrictions on entry into the sector of new competitors - Investments (Capital requirements) if lower investment. It is a new obstacle. And if a business that requires high investments it may make. For those who do not dare to compete for new investors decided. Because of the risk of operating at breakeven or a loss - because of the size of the economy (Economics of Scale) because those who do not meet the new pressures. In a matter of saving production costs. In large quantities to be able to compete with the former having the advantage of all aspects - the cost or expense of changing to another product (Switching cost) product offering to customers by the need to compete with the original. Existing Because customers do not need to turn to other products that are not familiar or do not want to waste money to alter certain process due to new products manufactured with the use of the same. Enabling customers are not interested in the shift to new products make new business may need to invest more in persuading customers to turn to buy their goods - Access Channel (Access to Distribution Channels) competitors. will require Try to intervene or influence the distribution channel by offering better to wholesalers - government policy. If the government has no policy to promote Or a prohibition concessions In Thailand, for example, is an obvious example. Mobile phone and digital TV spectrum concessions, etc. - unfavorable cost (Cost Disadvantages) in operation. New businesses may have higher operating costs. Such as investment research or knowledge. Including experience working and operating lines of business. It is this factor, it is more favorable to the operators existing four. The thrust of other products which can replace it - the replacement. Replace more Or replacement purged with air conditioning with fans - the cost or expense of changing the current product. To use its replacement - the replacement product prices and features of products using renewable five. The competition between competitors in the same industry - the number of competitors in the industry. If there is a lot or have the ability to equally inevitably result in a serious competition. But there may be some cases where, despite the number of low income households. And each has a similar proportion of the market, it could result in a serious competition as well - excess capacity. If any industry with high fixed costs, it is necessary to maintain the size of the high rates of capacity all the time. The unit cost is worth it to walk manufacturing belt. When demand (Demand) reduction, but the operator can not reduce production levels may have come down over the condition Over Supply - The growth rate of the industry. If the industry continues to grow The competition is not severe. The industry is growing at a high rate, it can absorb. It fierce competition only possible - ties in the brand (Brand Loyalty) difference of goods and services. The product is very different. The competition is less The stopping of the brand that usually if the impact of the five low values show that the industry is an attractive investment on the other hand, if the strength of the five high value indicates that the industry is highly competitive. Not a high risk investment.
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