Porter Five Forces Analysis and Saffron Art
Introduction:
Saffron art is an online art portal and an auction portal. A global company with deep Indian roots, Saffron Art was founded in 2000 on the drive and passion of the founders, today Saffron art is a name to reckon with as the firm embraces and drives change . Industry analysis:
Microenvironment analysis which allow for the firm to survive in the industry environment are driven by the political, economic, social, technological and legal factors.
The industry environment here is a virtual environment which has not caught up with the fancy of the people. Though art galleries are meant only for the rich, the industry is oligopolistic in nature. It is a clustered industry with only very few firms and galleries in it. The political environment depends of how the government looks at gallery and art auctions. The economic factors could be the foreign exchange that is brought in with foreigners interested in buying Indian jewelry and the subsidies that is given to promote these kinds of luxury items .The tax regime is another very convincing force. The copies and infringement could be something that saffron art has to deal with .since all the items sold by the gallery is highly private the status associated with a gallery of this kind is a social symbol.
Michael Porter’s five force analysis gives a perfect insight of how the firm reacts to the outside environment and to the internal capabilities. This study of the five forces model would have allowed Saffron art to gain its leadership in the art and auction portal by careful assessment of industry competitors , the extent of rivalry, the power of buyers and suppliers and most importantly the threat of substitutes. Knowing that this industry is in its infancy Saffron Art does not have any real competitors in India because of its exclusive offerings.. These factors allow the firm to be competitive and also allows the firm to accept and strategize its resources to gain the competitive edge
Saffron art is an online art portal and an auction portal. A global company with deep Indian roots, Saffron Art was founded in 2000 on the drive and passion of the founders, today Saffron art is a name to reckon with as the firm embraces and drives change . Industry analysis:
Microenvironment analysis which allow for the firm to survive in the industry environment are driven by the political, economic, social, technological and legal factors.
The industry environment here is a virtual environment which has not caught up with the fancy of the people. Though art galleries are meant only for the rich, the industry is oligopolistic in nature. It is a clustered industry with only very few firms and galleries in it. The political environment depends of how the government looks at gallery and art auctions. The economic factors could be the foreign exchange that is brought in with foreigners interested in buying Indian jewelry and the subsidies that is given to promote these kinds of luxury items .The tax regime is another very convincing force. The copies and infringement could be something that saffron art has to deal with .since all the items sold by the gallery is highly private the status associated with a gallery of this kind is a social symbol.
Michael Porter’s five force analysis gives a perfect insight of how the firm reacts to the outside environment and to the internal capabilities. This study of the five forces model would have allowed Saffron art to gain its leadership in the art and auction portal by careful assessment of industry competitors , the extent of rivalry, the power of buyers and suppliers and most importantly the threat of substitutes. Knowing that this industry is in its infancy Saffron Art does not have any real competitors in India because of its exclusive offerings.. These factors allow the firm to be competitive and also allows the firm to accept and strategize its resources to gain the competitive edge
References: http://www.saffronart.com/sitepages/AboutUs.aspx http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/