Porter’s Five Force Analysis – LinkedIn Essay
Porter’s Five Force Analysis – LinkedIn
LinkedIn has a lot of competition from the new entrants in the industry, like BranchOut, which provides recruitement services through Facebook, and Monster, which is again a new recruitment service website. But all these are just entering the industry and will not be able to shake the 300+ million strong company like LinkedIn easily. Yes there is a threat, but not something which cannot be sustained by LinkedIn.
Threat of Substitute Products – Moderate
Facebook and Twitter also provide recruitment services, but not a concentrated one such as LinkedIn. But professionals in LinkedIn do refer these sites to know more about their company and to keep in contact. But this is not something to panic for LinkedIn, as the first choice of professionals is still LinkedIn when it comes to recruiting.
Bargaining Power of Customers – Low
LinkedIn’s customers are mainly individuals, enterprises and professional organizations, and thus, are not concentrated. This would mean that their customers bargaining power is low. There is a possibility that users might switch to the competitor’s site, but since LinkedIn is providing very good service in terms of recruitments and professional connections, the chances of that taking place is less. Hence, it can be said the bargaining power of customers is low.
Bargaining Power of Suppliers – Low
The position of LinkedIn, when it comes to suppliers, is very strong, with no followers, it has international presence in providing services to attract different segment of professionals looking for online services. With the purchase of suppliers like mspoke in 2010 for $0.6 million and SlideShare in 2012 for $119 million (Mashable, 2012), they have strengthen their position in terms of suppliers for the market. So the bargaining power of suppliers can be termed low.
Competitive Rivalry within Industry – Moderate
LinkedIn has a moderate competition in the market, with Viadeo and Xing coming in the scene. These two social networking sites offer the same kind of professional platforms to the user, but have not captured the global industry to the extent that LinkedIn has. But, nevertheless, these are the upcoming sites, and there are plans of internationalizing their sites to reach out to various parts of the globe. Once it is done, there might stiff competition for LinkedIn. But as of now, with LinkedIn leading from upfront, the competitive rivalry within the industry is moderate.