Case Study Cho Bee Metal Industry
Michael Porter, an authority on competitive strategy and the Porter five forces analysis is a framework that may help Choo Bee Metal Industries Berhad to analyze level of competition within an industry and business strategy development. The Porter’s Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. It is useful for Choo Bee Metal because it helps to understand both the strength of their current competitive position, and the strength of a position that considering moving into. Porter five forces are include threat of new entrants, rivalry among existing firms, threat of substitute products, bargaining power of buyers and bargaining power of suppliers. This is a framework to analyze level of competition within an industry. Porter’s five forces consist of forces that close to a company that can affect its ability to serve its customers and make profit. The stronger each of these forces is the more limited companies are in their ability to raise prices and earn greater profits.
i. Threat of new entrants
New entrants to an industry will bring it to new capacity, a desire to gain market share, and potentially substantial resources. Profitable markets that generate high …show more content…
Therefore, they will most pay attention in material to match the products all the time. Therefore, the strong suppliers can pressure Choo Bee Metal by raising prices, lowering product quality, and reducing product availability. All of these things represent costs to the Choo Bee Metal. In some situation, buying industry often faces a high pressure because of the strong supplier can make an industry more competitive and decrease profit potential. The supplier’s product to Choo Bee Metals is highly differentiated and substitute products are unavailable in the marketplace thus the supplier bargaining power is