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Porter Five Force Essay

Food services (high)

Bargaining power of suppliers: low.
Food is a low cost industry; there is only a little price difference between different suppliers. The suppliers want to sell their raw material should accept the marketing price.

Bargaining power of buyers: low
The buyers can decide to choose a cheaper food because there is so many food service they can choose, the industry should establish an reasonable price.

Threat of new entrants: medium
People like to try new food. But if the industry has their own fixed customers, and making their own cooking style, the new entrants will not have a big entrant to them.

Threat of substitutes: high
The food can be replaced by another better food if the people like. It is not necessities to eat only one kind of food. There must to be some same cooking style in different brand, such as McDonald’s with KFC.

Industry competitors: high
Food service is very popularize in our life, there is many new food entrants around us, people always like to try different food.

General merchandise (low)
Bargaining power of suppliers: low
The general merchandise as a leading position to sell the products, as a result, suppliers power is low. Suppliers hardly affect the industry’s profit.

Bargaining power of buyers: high
The general merchandise becomes popular, and we have a lot of branded supermarket. Buyers can have much more choice between different supermarkets; they can compare the price to choose a cheap one.

Threat of new entrants: low
General merchandise cost is high so before entry this industry the entrants need lots investment. Many supermarkets already branded so the new entrants hardly to threat the old one.

Threat of substitutes: low or medium
There are might be many shopping way, like online shopping. However, general merchandise is the necessary part of people’s life, and also their different type of merchandise is the key factor to win. Industry competitors:high

The brand is various in this industry, they need branding their own store to strengthen the impression of people.


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