Explain the "five forces model" again. These five forces are: the bargaining power of suppliers, the bargaining power of buyers, the entry ability of potential competitors, the substitution ability of substitutes and the current competitiveness of competitors in the industry.
Bargaining power of suppliers: suppliers mainly affect the profitability and product competitiveness of existing enterprises in the industry through their ability to increase the price of input factors and reduce the quality of unit value. The strength of suppliers mainly depends on what input factors they provide to buyers. When the value of the input factors provided by the supplier constitutes a large proportion of the total cost of the buyer's products, which is very important to the production process of the buyer's products, or seriously affects the quality of the buyer's products, the potential bargaining power of the supplier to the buyer is greatly enhanced.
Tips: Therefore, the bargaining power of suppliers will have a greater impact on bulk commodities than on small commodities.
Bargaining power of the buyer: The buyer mainly affects the profitability of the existing enterprises in the industry by lowering the price and demanding higher product or service quality.
Tips: Therefore, the buyer's bargaining power will have a stronger impact on small commodities than large commodities.
The threat of new entrants: While bringing new production capacity and new resources to the industry, new entrants will hope to win a place in the market that has been carved up by existing enterprises, which may lead to competition with existing enterprises for raw materials and market share, and eventually lead to the reduction of profitability of existing enterprises in the industry, and even endanger the survival of these enterprises in serious cases. The severity of the threat of competitive entry depends on two factors, namely, the size of obstacles to entering new fields and the expected response of existing enterprises to entrants.
Tips: Therefore, the threat of new entrants will have a stronger impact on small commodities than on large commodities.
Threat of substitutes: Two enterprises in the same industry or different industries may compete with each other because the products they produce are substitutes for each other. This kind of competition from substitutes will affect the competitive strategy of existing enterprises in the industry in various forms.
Tips: Therefore, the threat of substitutes will have a stronger impact on small commodities than on bulk commodities.
Competition degree of competitors in the same industry: the interests of enterprises in most industries are closely linked. As a part of the overall strategy of an enterprise, the goal of each enterprise's competitive strategy is to make its own enterprise gain an advantage over its competitors. Therefore, conflicts and confrontations will inevitably occur in the implementation, which constitute the competition among existing enterprises. The competition among existing enterprises is often manifested in price, advertising, product introduction, after-sales service and so on, and its competitive intensity is related to many factors.
Tips: Therefore, the degree of competition of competitors in the same industry has a far-reaching impact on small commodities and bulk commodities.