Five Forces for Case study of company POH
In order to investigate POH power in the current market, Porters Five Forces tool can help analyzing business situation. It can help to understand company’s position in the market, to exploit firm’s competitive strength, find weaknesses and treats in order to analyze and minimize them. This analysis can give the big planning tool for the future moves into other market, or avoid mistakes running the business. As company has already expanded that much as it plans to supply more expensive goods to the same customers, the analysis of competitors and company’s situation can help POH to move to the markets in other countries. Five Forces analysis looks into five very important forces which are main constants keeping business competitive. These are:
1. Supplier power:
* There are many suppliers for metal and steel components and the prices are fixed, as they are based on market in London Metal Exchange. It means that these suppliers have no power under POH and only the lower price is an issue.POH has also metal production itself, which even strengthens their position among suppliers. * There are also many suppliers for plumbing and electrical goods. The purchases are divided into standard goods and special goods. It means that the suppliers for standard goods are easily found and switched, as the main factor choosing them is to negotiate the lowest price. These suppliers have no power under POH. * The suppliers for special goods are kept more sensitive and good relationships with them are the first importance. This can be considered as the supply power, as the delivery precision is the most important. At this stage POH has to keep close relationships and the power is divided, which means the big cost incurring when switching suppliers. * Size of suppliers is variable. There are many small suppliers and big wholesalers, company is using. All of them are basically concentrated within 1000km radium, which...
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