Title: Michael’s Porter’s five competitive forces in business
Business is a form of system that exchanged services or goods with money. When we commence a business in Singapore, we have to invest in that business with efficient capital. Successful businesses enable us to gain profit and expand our business to a larger size. Therefore, there are a few principles that we must comply. The most basic principle would be the Michael Porter’s five competitive forces.
Firstly, the most major force will be the rivalry among competitors. We should carry out some basic surveys to identify the amount of company in the same industry. By gathering information and analyzing the data, we can understand clearly about the trend in the market. We should identify and locate the rivalry that may act as a threat to our business and expel them by a business strategy.
Besides that, we should also concern about the threat of substitute of products and services. If there are a lot of substitutions for that certain products or services in the local market, it will be a difficult for us to start a new business. The demand of customers will be low because there are too many choices for the product or services. Hence, we should be more innovative in promoting our products and services to overcome this problem.
In addition, the bargaining power of the suppliers is also included in one of the forces. If the number of suppliers is high, then the bargaining power will be lesser. Consequently, we should recognize as many suppliers as we can to get a lower price for the raw materials. This is a business strategy because we can save more funds to expand the other area of our business.
Other than that, the bargaining power of buyers is also consider as a force. If the amount of customer is lesser, the bargaining power of them will become higher. So, we should target the level of consumer who needs our business products and services. If the demand of consumer is high, the price of our...
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