Porter Five Forces Model – East Timor Freight-Forwarding industry Potential Entrants In 1999, when SDV entered the East-Timor market there were significant barriers that made the entrance of any logistics company very challenging. The country was almost entirely destroyed, there was no infrastructure and it was really hard to find qualified staff to work with. Under these difficult conditions there were hardly any companies pursuing their efforts in East Timor, thus leaving the market mostly free to SDV for the subsequent years. Threat of substitutes Currently there is no real danger for substitutes to the freight forwarding industry as it basically deals with the shipping of goods that are not produced in East-Timor and there is no other way of having these goods unless they are brought from other places. As East Timor is also not a self-sufficient country and does not produce all the consumer goods needed within its own borders, freight forwarding companies will not face any threat from substitutes. *Bargaining power* of Buyers The costumers’ main issue is to ensure that the right cargo is released to the right consignee at the right time; so they want to work with the most reliable carrier to be sure that their cargo gets to the right destination. *Bargaining power* of Suppliers The typical supplier side of this industry is constituted by shipping companies that are responsible for transporting the cargo belonging to the customers of the freight forwarder. In the freight forwarding industry, the suppliers’ performance is one of the most crucial aspects in order to be successful. Therefore, choosing the right partner to work with is probably the most important decision a freight forwarder has to make. In East-Timor there are very few shipping companies, making freight forwarders highly dependent on their few or unique suppliers. As a consequence, the bargaining power of suppliers is significantly high. Rivalry among existing firms
References: Interview