Porter's 5 Forces Restaurants Pattaya

Topics: Substitute good, Porter five forces analysis, English-language films Pages: 2 (435 words) Published: December 9, 2012
1 2.1 Porter's five forces model

Threat of new entrants:
The threat of new entrants is quite low, as there is a lot of offer already existing in Jomtien. If the restaurants want to make profit they need to distinguish themselves from the others. Furthermore, it takes a lot of paperwork for a foreign person to open a restaurant in Thailand. He needs to follow many rules. Many of these rules are not for a Thai person. However, they need to have a bit of starting capital in order to start a restaurant.

Supplier power:
The restaurants often buy their products in the harbour or on a market. There are plenty of markets in Jomtien and the nearby city Pattaya. Therefore, the restaurants have a big choice between many markets. The supplier power is low.

Buyer power:
The power of the customers is high since there are many restaurants which they can choose from. There are many Thai, Russian, Scandinavian and Dutch restaurants. Only other type of food then mentioned will score higher on this point.

Threat of substitution:
Restaurants can be substituted by supermarkets and street stalls. People can choose to cook their own meals by buying products in the supermarket. Furthermore, if a person does not want to cook, they can always choose to buy some food on a stall on the street and bring it back home or eat it somewhere else.

Competitive rivalry:
As the threat of substitutions and the high power of customer, together with the big number of restaurants offering the same products, the level of competitors is high. More restaurants must compete for the same customers and resources. Also, as noticed out of experience the customer loyalty is quite high.

Figure 1 Porter's five forces model regarding restaurants in Jomtien

This analysis shows an impression about the current market. Summarised it can be said that the market has a lot of competitors with a low level of...
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