Adequate- Although your group assessed the impact of each force on your company, you did not take into account numerous market factors that could affect the evaluation of the forces, and overall the reasoning behind your evaluation was at times lacking, and at times incorrect. For instance, your explanation as to why the bargaining power of suppliers (workers) is a huge threat to your company made little sense, and did not delve deeper on as to why the bargaining power of the supplier is a big threat to your company. What you should have done, is evaluated it based on market conditions. If the unemployment rate was high, then your supplier would have a low bargaining power, but if the unemployment rate was low, then the supplier would have a high degree of bargaining power. You did not give an adequate reason for as to what the threat of substitutes is. Using the threat of supplier as being high (which is incorrect) as a justification as to why the threat of substitutes is low is unacceptable. Your group should have examined other potential sources through which your consumers could find workers (for example websites such as monster), and their effect on your company. Your group provided an adequate explanation for the threat of entry, but your group should have provided a better justification, and your group should have examined factors that can influence the threat of entry into this market. As for the threat of rivalry, again you should provide better reasoning as to why the threat of rivalry is low. Simply saying that your company is established in the market is not sufficient. Lastly, your evaluation of the bargaining power of buyers is incorrect. Your buyers have numerous source of supply for labor. They can get it from other contracting agencies, they can get workers through their website, and they can get workers through online sites such as monster or craigslist.
*MOST IMPORTANT* Bargaining power of suppliers is the most important for our industry. Companies within this industry depend on the number and quality of workers that sign up with them. With no suppliers, in this case the workers, there will be no buyers, which are the companies hiring the workers., Threat of substitutes: supplier power is more important, because the quantity and quality of suppliers the company has, affects how strong or weak it is compared to the substitutes., Threat of new entrants: if a lot of information and data is acquired through the suppliers that sign up, it can act as a barrier to entry for other firms., Bargaining power of buyers: this is not as important as bargaining power of suppliers because without suppliers in the first place, no demand from the buyers can be generated., Threat of rivalry: this is not a big threat to our company because City Workforce is a pretty well established firm in Canada presently and together with high quality supply of workers, it will not be easy for competitors to match our company.
Weak+ Many of the justifications that your group provided are inadequate and/or incorrect. Your group did not try and go that extra mile and come up with reasons that were not obvious and reasons that actually added some value to the discussion. For instance, stating “switching costs are low” for Rivalry is simply not enough. You have to tell us why those switching costs are low. You should also have come up with at least one other reason for Rivalry. You did a good job for potential entrants; you examined several different factors as to why there is a low level of potential entrants. That being said, we would have liked to see you expand upon those reasons, and give us some examples. Your reasoning for low supplier power is simply inadequate and wrong. Why and how would a lack of a union affect the supplier power? Again, you have to expand upon your reasoning. Your group also failed to mention any reasons for the power of the Buyer.
Switching costs are low
low level of potential entrants due to high start up costs, high risk in terms of repairs and capturing the market
Low supplier power because of lack of union
Friends and family, it is common and easy to ask for the help of friends and family when moving
Self moving company ie) u-haul
Adequate+ Your group did a good job identifying the most important force. It is very good that your group tried to come up with several reasons as to why the substitute is the most important. We liked the fact that you examined companies such as U-haul, and gave a good reason as to why it is a substitute. Same thing for the DIY, we liked the fact that you identified several reasons as to why people may just do it themselves rather than using this service. Furthermore, we liked your conclusion about why substitutes are the more important force in the moving industry, and it shows us that you have a decent understanding of the moving market. That being said, we would have liked to see better reasons for the rest of the 4 forces. Your group should have expanded upon those reasons, and you should have given us less obvious reasons. Next time, you should come up with more thought out reasons.
U-haul, If don't have the resources- People can rent moving trucks and do the manual labour on their own- eliminating the need for moving services
DIY, If people have the equipment and man power, they may choose to move themselves. moving company isn't a necessity- it's a luxury.
Why Substitutes are the most important in the moving indusry:, You can be the best moving company- but if the customer doesn't require your services and can substitute them, they won't hire you.
Potential entrants, high start-up costs (trucks, searching cost for employees, licensing, marketing, etc), difficult to differentiate services- people will stick to the companies that have already proved to be reliable
Supplier power, Service industry- after buying capital (trucks) suppliers become less of a concern
Rivalry, second largest issue: Difficult to differentiate services., Reputation: once a customer has found a reliable moving company, they are likely to be loyal, spread the word in reference groups
Unacceptable Your group did not satisfy any of the requirements of the tasks that were given to you. Your group did not examine all of the five forces and its effects on your company. Furthermore, your reasoning for supplier power is inadequate. It does not give a clear and coherent argument for as to why the supplier is the most important.
Suppliers - Investment advisors at VanAlyst have the large asset of investment knowledge and expertise. However, the highly cyclical economy is decreasing this force.
Weak For your most important force, you've stated a fact but haven't given an argument. For supplier power, the company description states that you are in a recession at the moment, so focus on that scenario. Unclear argument for rivalry, you haven't mentioned the other firms in your industry. For substitutes, clarify your argument. There are some good substitutes listed but it's unclear whether they are a threat or not. Nice argument for potential entrants, your best point.
Most important - If you don't have the employers, you don't get any job seekers
Buyer (i.e. companies) provide revenue stream
In recession: Employees have less control, since there is less jobs available
Not in recession: Employees have to compete less for jobs and have more power, also to pressure intermediaries such as CityWorkforce. However employers provide the jobs and therefore influence people's decision on which recruitment firm to choose
Not a lot of rivalry in a locally based firm like CityWorkforce. Success based off goodwill
Barrier to entry: Reputation. New entrants will have difficulty as they are not established and require a big employer/ee base to compete.
CityWorkforce already has this reputation
Finding employment without recruitment agency - energy and time intensive, Go^t sponsored jobs: Not a lot of availability. A lot of control
Hidden Market (time intensive for both employers and employees if network is weak)
Adequate The points made are well organized and very concise. Your top threat is well thought out, but if you are going to say that new entrants have more technology, (especially since you are a relatively new entrant) you need to support this with evidence. Also, does it really just take a truck to start a moving company? If I had one, would you pay me? Would you trust me with your things? For rivalry, the reality is that there are very established moving companies but you have clearly stated your assumptions. For substitutes, consider how many people choose to move on their own. How will you tap this market? Overall, you make good arguments but most of the information given can be easily found.
cheap to start up your own moving company. All you need is truck, workers
growing demand for service will attract new businesses.
no barriers to entry
Hard to distiniquish yourself from another company. Only way would be to rely on reputation.
Offer a pretty standard service that is easily replicated. No real competitive advantage. This means that new entrants could easily take business away by offering a slightly lower price and when MoveIT loses customers it would be difficult to re-attract them.
new entrants have more technology, we need to invest in technology and retrain current staff to use it
Rivals, Demand is growing, assumed there is not enough supply to meet the demand for this market, we are a start up company, must be profitable to enter market, meaning no extremely dominant/established moving companies
Suppliers, Our suppliers are the movers. With the bad economy many people are looking for work which means the bargaining power of movers is not very high., Movers do not really have special skills to differentiate themselves. therefore they cannot really negotiate higher prices
Buyers, Service is in great demand so have little power in driving price down.
Substitutes, only other choice is to move your items youself, If items are too heavy for you to lift then don't have any other choice
Unacceptable The maps are supposed to give you time to think through your project as you learn the material. You seem to have considered three of the five forces but you haven't answered the question asked. Try not to deal in hypotheticals either, analyze the current situation from the perspective of your business.
Buyer Power, Dependent on the patients value of our service: do they value free medical service, with for example a higher wait time, or would they rather receive rapid service at a higher price?, However, since demand for medical services is much greater than the supply, buyers have low power in this industry
Rivalry, Since it is not common to start a private practice, we can assume that rival companies will provide top notch, good quality services. If a rival can manage to lower cost and provide any service at a lower price, it will greatly influence our market.
Substitutes, Government funded Medical Clinics: substitute service, if their services are difficult to receive or the customer service quality is low, we will have a higher number of patients
Adequate Make sure you clearly answer the question asked. The points made are correct but not very insightful leaving the reader to ask "Why?". Why do buyer's not have influence on prices? Why do those other companies limit your success? Also, for the substitutes, you've explained U-Haul well but FrogBox and its threat to your company are not described. Consider adding outside information, it is always a great way to build and support your arguments.
Substitute, Because there are many alternatives to moving companies that really limit their success., FrogBox, U-Haul: Firstly people can move things themselves with their own cars, Uhaul can also be used if they don't have a large enough vehicle.
Rivalry, Somewhat of a big factor as this industry is dominated by a couple of companies, in tight competition because they offer the same service and prices will make the majority of the difference
Buyers, Buyer power is not very relevant as the customers do not have much power to change the price of the company
Suppliers, Suppliers dont play a major role as we do not sell commodities, nor do we use a large capital base that is dominated by a company and not interchangable
Potential New entrants, New entrants are not a significant factor of our moving company because firstly it takes more than a truck to start a business, the brand name is very important, because people need to trust the company with their items. Secondly there isen't a major amount of profit in this sector to attracts many new entrants, doubtful that there is "economic" profit
Unacceptable You have decent points in your rivalry section but you should explain each one. Commission-based revenue, for example, creates a much more competitive environment. You haven't stated this though, no point has been made to support your argument. Also, relatively speaking, the real estate industry has low barriers to entry. The amount of capital and risk involved in becoming a new agent is nowhere near opening a retail outlet for instance. More effort needs to be put into your next map, there shouldn't be empty nodes.
Rivalry, The large number of competitors present in the industry serves as the most potent force for the following reasons:, Largely homogenous services that do not separate firms from others. Some customers might be indifferent to all firms., Commission based revenue streams, Marketing differentiation of different agencies is correlated to success
Potential Entrants, The industry is predominantly controlled by a few large firms and entry is restricted by licensing controls., There are substantial costs associated with obtaining licenses. Training to become a real estate broker requires time and money.
Unacceptable Information is very unorganized and arguments are unclear. Incorrect information: potential entrants are a threat (very small barriers to entry when stagnant period subsides) and obvious substitutes such as craigslist and Do It Yourself. Other information given is either in the wrong place or irrelevant to the question asked.
Adequate Good answer for your most important, well thought out. Arguments given for buyer power and substitutes are too obvious. Also, you've said both that "[Your] product is differentiated" and that your "Product lacks differentiation". Although it seems like you mean that compared to non-organic foods it is differentiated and compared to organic foods it is not, you should explicitly state this. The reasons given for new entrants and rivalry are concise and accurate, good work.
Most Important: High Threat
Our success is directly correlated with suppliers, Financially: Our ability to supply organic foods depends on supplier yields which is affected by many variables including weather, inputs, epidemics (e.g. h1n1/animal flues), Organic farming is expensive and in limited supply, yet there are a great deal of organic food sellers (Whole foods etc.) so securing the farmers' organic goods at a competitive cost could prove to be challenging, High switching costs (from non-organic to organic), Product is somewhat unique, Domination of supply by few suppliers
Our product is differentiated enough and has a target market that will seek out our product over alternatives even if prices are relatively higher
Any other substitute for organic foods do not fulfill the unique benefit that organic foods offer, Substitutes such as non-organic foods are not direct substitutes for organic foods for organic food consumers
Capital requirements (rent/storespace etc.) are high and there is difficulty in accessing distribution channels
Though rivalry is a significant force, it is not the most important, Competitors in supplying organic foods to consumers are numerous and continuously growing, Product lacks differentiation and has high switching costs, However, industry growth is FAST which decreases rivalry so, though significant, rivalry is not the most significant force
this is our biggest threat
- Since we’re a private company, our prices would generally be greater than other companies who are subsidized by the government and also who are roughly the same in size
As a dentistry, most people would go to public places with lower prices therefore our company must think of many different ways of why they should come to our company instead of others, Customer oriented, make the customers feel that they are really cared for, Our uniqueness, Create trust; that we are not just about profit, provide professionalism, show quality and consistency
we assumed that most dentistry companies get their equipment and assets from roughly the same providers so this would not be too much of a threat for us
- Going to a geographically distant dentistry
Not a big threat because the starting cost is very high
Adequate- I like the highlighting, that definitely helps. Make sure to focus on answering the question asked: don't just list all the types of competition, give a reason why competition isn't as important as supplier bargaining power. Also, for buying power, you should be considering the power that your consumers have over your business. For the threat of new entrants, make sure to consider barriers to entry. Even though a store could charge less, would it really be sustainable for them to do so? Add some specific examples and more critical thinking wherever possible, but I like the structure.
Organic food stores tend to price higher, if a new entrant can sell for lower, then people may switch over to this new store However, we still have an advantage by selling online since many upstart new companies would not have the capital to invest in an online system including delivery costs
MOST IMPORTANT because we rely heavily on them for our products, and without products we cannot sell. Unforeseen circumstances can deplete our product availability. We may not be guaranteed to receive a consistent supply of product. Suppliers are vital to maintaining our competitive advantage--our prices are based on suppliers.
Direct competition such as bigger wholefood companies who are not local. Supermarkets with large organic food sections and local farmers who sell directly to customers (these are usually extremely loyal customers)
high competition because there are many alternatives like non-organic food for those who don't care as much about where there food comes from such as fast food joints, other restaurants also many people do not know or care about the health benefits of organic foods and would not go out of their way to buy them, especially for their premium price
Low. Since Good foods is a small chain, they are unable to buy largely in bulk and reduce the price they buy from farmers. Low negotiation power because they are dependent on local suppliers.
Weak The bargaining power of consumers is very low in healthcare but the threat of substitutes (government healthcare) is pretty substantial. Remember, this is a private clinic. The difference between rivalry and substitutes isn't clear in this map, and some points are contradicting each other. Also, only three of the five forces are considered. Choosing rivalry as the most important force is plausible but a better reason than having to compete with others is required.
Buyer power is not very important, since medical service is essential for sick patients.
Rivalry - would be the most important force. Within rivalry there are the other big clinics and public hospitals within the area. We have to compete with the others.
Threat of substitutes is low since there is no real substitute to medical services.
Buyer power wouldnt be that important, because most of the people in canada got health insurance. Patients would care too much about the cost.
Your group did a good job identifying rivalry as the most important force for your company. We liked the fact that you listed several reasons as to why your group believed that rivalry is the most important force. Furthermore, we liked seeing reasons that were not plain and obvious, and it is clear that your group put some thought into identifying the most important force. That being said, we do wish that you would have come up with more, and less simple and obvious reasons as to why you did not pick one of the other 4 forces. For example, stating that there are a large number of suppliers and telling that they do not pose a huge threat to the industry is not enough. That is because it’s quite obvious that if there are a large number of suppliers then they won’t pose a huge threat to a company. Your group should have come up with more thought provoking reasons.
The industry has a lot of different companies/ competitors who sell both organic and non-organic foods
because customers are fairly indifferent among goods the potential for competition is high
Prices for our stores will be higher than other non-organic stores who can compete via price
not only competing with other grocery stores but also organic cafes, delis etc
The industry is very competitive and sensitive to competition especially on the community level
substitutes, there are limited substitutes (ie organic and non organic) but the people who buy organic food have a hight loyalty to the product and therefore substitues are not the most important threat
Buyers, The customers for the organic food industry are highly committed to the product, and are also within a stable target market usually at a higher income and therefore less sensitive to price
Suppliers, because there are a large number of suppliers, the threat they pose to the industry as a whole is not very large
Potential entrants, Because fresh food is highly perishable, it would be hard for entrants to enter the market with the same product diversity and suppliers that an established firm has access to
Adequate Your group did a good job at examining all of the forces and identifying the force that poses the largest threat to your company. Your group provided good reasons as to why rivalry is the most important, and you intertwined several factors to justify why rivalry was the most important. You did have a few weaknesses though. The main weakness was the fact that your group did not examine more than one factor that could affect each of the other 4 forces. Furthermore, several of the reasons that your group provided were quite obvious, for example the reason provided for the potential entrants. What we wanted to see, was some thought provoking factors justifying the power of each of the 5 forces.
1. Rivalry *Most Important There is slow industry growth. The product is somewhat undifferentiated. Many competitors with same size and power.
Potential Entrants Threat: There are limited barriers to entry as the realtor license is relatively easy to obtain. No need for post secondary education
Buys Bargining Power: Buys have bargaining power to negotiate commission depending on the size of the property
Substitute Threat: There are not many substitutes besides fore sale by owner. However, in this market many people would prefer to use a realtor
Supplier Power: The realtors have a data base and knowledge that is not accessible by outside sources
Weak+ The group did not do a very good job of identifying the forces that can affect the company and the industry as a whole. The reasons you gave for choosing rivalry are a bit too simple and obvious. Yes we know that there are companies such as Goldman in the industry, and it is quite obvious that they will have an effect on the company. Your group should have thought about several other things that could have affected your company (from a rivalry perspective). The same thing goes for potential entrants, it’s quite clear that reputation and expertise is quite important in such an industry. You should have examined why it’s important, and you should also have examined other potential barriers to entry, not just reputation. Lastly, you did not provide adequate reasons for as to why you did not choose the other factors. Simply stating that suppliers are not an important factor in the financial industry is not enough. That reasoning is also quite contrary to what your group said in reference to the importance of the employees. Your group should realize that employees/workers are the suppliers of the financial industry, and therefore they are also important.
Goldman Sachs - provides similar services but with much larger and wider capital resources
We chose rivalry because there is very strong competition in this market. There are currently many investment firms and VAnalyst must try to differentiate themselves from their competitors
New entry is difficult because there are many barriers to entry. For example, reputation is very important and new entrants may find it difficult to sufficiently build up their reputation in such a competitive market.
This field also requires many employees with a high level of expertise, which can be difficult to find
Suppliers, Suppliers are not an important factor in the financial services industry. There is no "
The justifications provided by your group are inadequate. They don’t go anywhere beyond stating the obvious. Furthermore, some of your reasoning is incorrect. For instance, when talking about the potential entrants, you state that it is irrelevant due to the fact that the business idea is new. The justification makes no sense. First of all, it is not a new business idea; such companies have existed in the past. But, assuming that you were right and that it was a new business idea, so what? Why can’t new companies enter the market? You have to provide us with more concrete examples and reasons as to why potential entrants are not a huge threat to you. For instance, you could have talked about the high startup costs, or you could have mentioned the difficulty a new company would have acquiring a customer base given that the companies that are already in the market have loyal customer base and that they already have a good reputation. You reasoning for rivalry is also lacking. Again, expand and give more reasons, simply stating “lack of competition” is not adequate enough. Furthermore, your group only discussed 4 forces, where is the 5th one?
Adequate Your groups reasoning as to why Rivalry is the most important is sound. You provided us with several different reasons as to why you believe it is the most important. That being said, the reasons that were provided are a bit too simple and obvious. What you should have done is expanded on the reasons that you gave, as well as thought of reasons that were not obvious. The reasons that you provided for not picking the other forces are inadequate. Just like before, many of the reasons that you provided are obvious and one dimensional. For instance, simple saying “difficult to get new customers” is not good enough. Tell us, why is it hard to get new customers? In what cases is it hard to get new customers (maybe it depends on the economic conditions of the industry). Also, think of more than just that reasons as to why the Buyer is not as important.
difficult to price products at competitive price due to high starting costs for organic grocery
has already more established competitors of the same industry- small organic food chains like IGA
in addition to small organic chain rivalry, must compete with large supermarkets
organic products - not much room for differentiation
high switching costs for possible consumers - difficult to gain new market share
Threat of new competition, High cost to enter industry making it hard for others to enter thus, lack of new competition, diffcult for starting companies to get contracts with suppliers
Suppliers, Don't have many optinons, very limited local organic suppliers, already have contracts with suppliers, unnecessary to find new suppliers until market cap is big enough
Substitutes, existing local loyal customers, Store is highly specialize in organic foods - Not many store can operate with being this specalized
Buyer, difficult to get new customers
Adequate Your group provided adequate responses to the question at hand. Your reasoning was sound, and the information was accurate. That being said, although your group provided several reasons for each force, you never actually expanded upon those reasons. Many of the reasons that you provided are obvious and do not add anything to the table. For instance, stating that supplier power is low due to a small number of real estate companies in the market is not good enough. You should both expand on that reason, and think of more reasons as to why the supplier power may be low. During your thought process (for any of the forces), you may discover that what you initially though is incorrect, and thinking of more factors, will help you come to a more accurate conclusion on as to the importance of each force.