Currently, I am planning to open a new navigation equipment company with my friends. However, I am not sure if I can make profits in this market. As new entrant, I have to get to know of the current competitive condition of the navigation industry. Thus I do the navigation industry business environment analysis based on Porter's Five Forces Model, and further try to effectively dodge and reduce entrepreneurial risks of failure.
1. Threat from potential new entrants( High)
Current, the navigation market exists some unfavorable conditions that definitely hinder new entrants access to this industry. First of all, starting a new navigation equipment company definitely requires much higher initial investments and fixed costs. In the meantime, the company needs many qualified and experienced staffs work for you, who are the core of the company. But, the problem is that what your advantages are and what benefits the employees can get from your company relative to other existing companies. Moreover, the existing companies have the cost advantages due to long term experience in operation of the company. They also have complete distribution channels. Those advantages will not be met easily or in a short span of time. That is higher risky for me to enter the navigation market. The other issue I have to concern is that the US and European navigation market is saturated. No much more demands for the GPS devices. Thus, it must be no much opportunity or profits in Navigation industry for new entrants enter this market.
The another threat or barrier could be the legal and environment restrictions on the digital navigation industry. Currently, the number of accidents, due to the distraction caused by using the GPS devices, are increasing. This issue has already been focused by the government and the consumers. Thus, the possible results would be that all navigational equipments are legislatively banned to use in dashboard or the windshield. That will severely affect the...
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