Porter Five Forces Analysis and Bargaining Power

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Porter’s five forces assessment of cleaning industry
In this section, we assess the cleaning industry through Michael E. Porter’s five competitive forces. The main uses of five forces are to reveal the industry’s current profitability and determine the competitive intensity. Porter’s five forces consist of the threat of new entrants, the threat of substitute products or services, bargaining power of suppliers, bargaining power of buyers and rivalry among existing. Next, the five forces are introduced and after that applied in cleaning industry of Malaysia. Threat of Substitutes

In general, industries are more attractive when the threat of substitutes is low. This means that products or services from other industries can’t easily serve as substitutes. In contrast, when close substitutes for a product or service do exist, industry profitability is suppressed because consumers will opt not to buy when the price is too high. In cleaning industry, the threat of substitutes of services is relatively medium. Due to the numerous of residential house and office around the KL area, the growth of cleaning industry is becoming fast. In the 20th century, everyone is finding a clean, comfortable, relaxing and safe environment. The wants of cleaning service is slowly change to a need. In the KL area, we had found that around 76 cleaning company is provide similar services compare to our company. To retain the customer, we will provide high performance of service with low price to create customer satisfaction to our service. Most of the cleaning company is focus on residential house area while our company is expand the field such as provide service to office, hotel and also hospital. So, our management team is able to overcome this threat of substitutes.

Threat of new entrant
An industry will be more attractive if the threat of entry is low. Thus, the competitiveness within the industry will low. In contrast, if the threat of entry is high due to low entry barriers, the...
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