https://research-methodology.net Necessary knowledge to conduct a business research Sun, 18 Feb 2024 04:50:23 +0000 en-US hourly 1 https://rm-15da4.kxcdn.com/wp-content/uploads/2020/08/cropped-logoBRM-32x32.jpg https://research-methodology.net 32 32 https://research-methodology.net/byd-porters-five-forces-analysis/ Sun, 18 Feb 2024 04:50:23 +0000 https://research-methodology.net/?p=77555 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. BYD Porter’s Five Forces are illustrated in figure below. Porter’s Five Forces   Threat of new entrants in BYD Porter’s Five Forces Analysis Threat of new entrants into EV sector is low to moderate. The following are the main factors that determine the intensity of this threat.   Massive capital investments Requirement for huge capital investments is a significant entry barrier for potential entrants into the EV market. In order to succeed new players would have to introduce improvements in battery range and life, charging speeds, efficiency or vehicle performance. Any of these achievements would necessitate investments in research and development and it would be hard for new market players to compete with deep-pocketed existing market players in this front. For example, Volkswagen plans to invest €35 billion in EV R&D by 2025[2], while Ford has allocated USD50 billion by 2026 for the same purposes[3].   Possible retaliation from current market players New entrants in the EV EV market can expect varying degrees of retaliation from existing businesses, depending on several factors. For example, established automakers such as Tesla and BYD can reduce prices on their own EVs to undercut new players, increase marketing and advertising efforts to maintain brand awareness or lobby against government policies favouring new entrants. Moreover, oil and gas companies feeling threatened by the shift away from fossil fuel may spread misinformation about the environmental benefits of EVs or pressure lawmakers to delay or limit EV incentives   Customer switching costs These are the expenses, efforts, and time involved for customers to switch from their current EV brand to a new one. They can be tangible (financial) or intangible (psychological and time-related). For tangible expenses,…]]> https://research-methodology.net/marriott-porters-five-forces-analysis/ Sat, 28 Oct 2023 00:53:41 +0000 https://research-methodology.net/?p=75998 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in figure below: Porter’s Five Forces   Threat of new entrants in Marriott Porter’s Five Forces Analysis The threat of new entrants into the global hotel industry is moderate. There are a number of factors that make it difficult for new entrants to enter the hotel industry. These include high capital requirements, the importance of brand recognition, lack of access to distribution channels and the importance of economies of scale.   Capital requirements The hotel industry is highly capital-intensive. New entrants need to have a significant amount of capital to invest in building or acquiring hotels. According to data from hospitality consulting firm HVS, ground up construction of a full-service hotel typically costs USD 323,500 per room in the US.[2]  The similar pattern is echoed in many other markets as well. Accordingly, capital requirements are a significant entry barrier for new players into the hotel industry.   Brand recognition Established hotel brands such as Marriott, Hilton, IHG Hotels & Resorts, Hyatt and Wyndham Hotels & Resorts have a significant advantage over new entrants. These companies have been developing and promoting their brands for decades and accordingly, have a strong reputation and customer loyalty. Moreover, effective branding enables established market players to command premium prices, further solidifying their position. New entrants, on the other hand, will have no visible brand, making it difficult for them to successes in the market.   Distribution channels Distribution channels for hotels include direct channels, such as their own websites and reservation call centres, and indirect channels, such as online travel agencies (OTAs), global distribution systems (GDSs), and tour operators. Established hotel brands such as Marriott have well-established distribution channels.…]]> https://research-methodology.net/netflix-porters-five-forces-analysis/ Thu, 21 Sep 2023 00:57:35 +0000 https://research-methodology.net/?p=75505 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in Figure 1 below: Figure 1. Porter’s Five Forces   Threat of new entrants in Netflix Porter’s Five Forces Threat of new entrants into the on-demand media streaming is low. Setting up a video steaming website is not difficult from a technical point of view. However, adding an adequate amount of content with the permission of copyright holders and gaining market share is highly difficult. The following are the most noteworthy challenges for new market entrants.   Market saturation The market of on-demand media streaming is highly saturated with the streaming giants such as Netflix, Amazon Prime Video, Disney+, Hulu, Apple TV+, HBO Max and others dominating the global market. The majority of representatives of the target customer segment i.e. people with phones, tablets or TVs with internet connection are already subscribed to one or more of the leading streaming services mentioned above. It will be challenging for new market entrants to attract enough subscribers to make a break-even in this sector   High entry costs Major market players such as Netflix focus on original content in general and its quality in particular to differentiate themselves in the market. As illustrated in Figure 4 below, the titles of original content produced by the largest streaming service in the world, as well as the hours watched by its customers have been consistently increasing for the past 10 years with the exception of a decline in 2021. Figure 2 Netflix original content by years of transmission[2] Netflix original content spending exceeded USD 5,8 billion in 2022[3] and its main competitors also spend billions of dollars annually for creating new films and programs. Accordingly, the…]]> https://research-methodology.net/apple-porters-five-forces-analysis-3/ Sat, 01 Jul 2023 00:55:58 +0000 http://research-methodology.net/?p=6491 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. Apple Porter’s Five Forces are represented in Figure 1 below: Figure 1 Porter’s Five Forces   Threat of new entrants in Apple Porter’s Five Forces Analysis Threat of new entrants into consumer electronics industry is not substantial. The following factors, among others, determine the threat of new entrants into the industry to compete with Apple: 1. Massive capital requirements. Manufacturing technological devices and producing operating systems require massive capital investments. As illustrated in Table 1 below, the top players in the market invest billions of dollars in R&D in order to keep the pipeline of new products and services active. New market entrants will have to produce new products and services that will have to compete with products and services of top players that invest billions of dollars every year in R&D.   Rank Company R&D spending (USD) 1 Amazon 70.3 billion 2 Alphabet 38.1 billion 3 Meta Platforms 34.0 billion 4 Apple 25.3 billion 5 Microsoft 23.0 billion 6 Samsung Electronics 18.2 billion 7 Intel 17.5 billion 8 Roche 16.0 billion 9 Volkswagen 14.0 billion 10 Johnson & Johnson 14.0 billion Table 1 Top R&D spenders among technology companies in 2022   Moreover, capital is needed to obtain resources in general and to attract human resources and talented employees in particular. Accordingly, it is safe to argue that access to capital can prove to be a substantial entry barrier for new businesses. 2. Economies of scale. Economies of scale are substantial entry barrier into consumer electronics and tech industry. New players will find it difficult to compete with established global brands such as Apple, Samsung, Google and HTC that are able to gain cost advantage…]]> https://research-methodology.net/nvidia-porters-five-forces-analysis/ Thu, 22 Jun 2023 05:06:58 +0000 https://research-methodology.net/?p=74435 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] consists of five individual forces that shape an overall extent of competition in the industry. Nvidia Porters Five Forces are illustrated in figure below: Porter’s Five Forces     Threat of new entrants in Nvidia Porter’s Five Forces Analysis Threat of new entrants into graphics processing unit (GPU) industry is low. The below are the main factors that determine the level of threat of new entrants: 1. Time of entry. GPUs are highly saturated market with dominant market players already in the business for decades. Moreover, customer loyalty towards dominant players such as Advanced Micro Devices (AMD, Intel Corporation, Qualcomm Inc., Broadcom Inc. and Arm Holdings (a subsidiary of Softbank Group) is high this fact crates entry barrier for potential market entrants. 2. Massive investments. GPU producing requires massive capital requirements of millions of dollars. It will be very challenging for potential market entrance to secure funding for producing GPUs unless they offer unique competitive advantages with the potential to disrupt the market. 3. Specialist knowledge. GPUs are highly advanced technological products. The production requires highly specialist knowledge and technological know-how. New market entrants will face substantial difficulties in terms of finding employees with specialist knowledge who will agree to join a new company in a highly saturated market.   Bargaining power of buyers in Nvidia Porter’s Five Forces Analysis The bargaining power of buyers for Nvidia products is generally insubstantial. The following considerations need to be taken into account in this regard: 1. Switching costs. Nvidia’s products are often integrated into larger systems and it is often difficult to replace these products with similar products produced by competitors due to massive costs and expertise knowledge involved. Such a situation limits buyer bargaining power with positive implications for Nvidia. 2.…]]> https://research-methodology.net/wework-porters-five-forces-analysis/ Thu, 23 Feb 2023 03:32:50 +0000 https://research-methodology.net/?p=72707 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. WeWork Porter’s Five Forces is illustrated in figure below: Porter’s Five Forces   Threat of new entrants in WeWork Porter’s Five Forces Analysis Threat of new entrants into the flexible workspace industry is significant. The following are the major factors that affect the threat of new entrants into the flexible workspace industry. 1. Time of entry. Increasing numbers of start-ups and solopreneurs are increasing demand for flexible workspace. Furthermore, COVID-19 pandemic has proved the inefficiency of committing to long-term traditional real estate lease agreements for many businesses. Instead, companies of all sizes increasingly prefer to flexible workspace to accommodate their changing needs for desks throughout the year. This tendency may motivate new players to enter the industry. 2. Massive capital requirements. Leasing real estate and furnishing them into creative open space is expensive. Investors may not be keen to finance such business proposals due to low profit margins and long payback periods of their investment. Massive capital requirement is a serious barrier for new entrants.  WeWork’s co-founder and former CEO Adam Neumann was able to raise billions of dollars for the business by positioning the company as an internet technology company, rather than real estate company it is. 3. Lack of technological barrier. Unlike technological and manufacturing businesses there are no know-how barriers to enter the flexible workspace industry. There is no secret formula or advanced software a company needs to develop to enter the industry.  Massive capital requirement is the only barrier and the absence of other barriers may attract new players into the industry.   Bargaining power of buyers in WeWork Porter’s Five Forces Analysis The bargaining power of buyers in flexible workspace sector…]]> https://research-methodology.net/starbucks-porters-five-forces-analysis/ Fri, 07 Oct 2022 02:05:53 +0000 http://research-methodology.net/?p=1491 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. Starbucks Porter’s Five Forces are represented in figure below: Porters Five Forces   Threat of new entrants in Starbucks Porter’s Five Forces Analysis Threat of new entrants in international coffee chain industry is low. The following factors reduce the threat of new entrants for Starbuck’s industry within Porter’s Five Forces. 1. Market saturation. Coffee chain market is highly saturated and more so in developed countries. Market saturation implies an increase of a market share for a specific coffee house at the expense of a competitor. New entrants into the coffee house chain business find such a reality discouraging to enter the business and achieve long-term growth. 2. Access to distribution channels. New market entrants are going to face significant issues to access distribution channels because potentially attractive locations for coffee stores are already occupied by coffee chains, restaurants and retail outlets. It took Starbucks 36 years to reach its current status that comprises total more than 33800 company operated and licensed stores.[2] Similarly, other major players such as Costa, Caribou Coffee,McDonald’s, Dunkin Donuts, Pret-a-Manger have secured thousands of advantageous locations during the decades of operations. 3. Economies of scale. Establishing coffee house chains requires massive capital investments. It can prove to be highly challenging to secure investment to establish new business in this industry unless the business plan is based on previously untapped value proposition.   Bargaining power of buyers in Starbucks Porter’s Five Forces Analysis Bargaining power of Starbucks buyers is significant. The following considerations need to be taken into account in this regard: 1. Abundance of choice. Customers can choose from a wide range of established coffee chains as well as local specialty coffee…]]> https://research-methodology.net/ikea-porters-five-forces-analysis/ Tue, 16 Aug 2022 00:40:44 +0000 http://research-methodology.net/?p=1560 Porter’s Five Forces model is “a generic framework that deconstructs industry structure into five underlying competitive forces or variables”[1]. IKEA Porter’s Five Forces are represented in figure below: Porter’s Five Forces   Threat of new entrants in Porter’s Five Forces Analysis Threat of new entrants to furniture and home appliances manufacturing industry in general is significant. The following set of factors, among others affects the intensity of threat of new entrants into the industry. 1. Lack of regulatory or technological entry barriers. There are no legal or regulatory barriers to enter the furniture industry. Moreover, knowledge barriers are not substantial as well because furniture producing processes do not involve advanced know-how that is difficult to replicate. 2. Economies of scale. IKEA benefits from the economies of scale to a great extent internationally and this advantage allows the Swedish furniture chain to maintain highly competitive prices. No new market entrant would be able to utilize economies of scale to IKEA’s extent and thus, competing with IKEA on price level remains as a highly challenging, if not impossible task. Such a situation discourages potential new players to enter the industry. 3. Distribution channel barriers. Although there are no regulatory or technological entry barriers as discussed above, distribution channel entry barrier exists. It took more than seven decades for the Swedish furniture chain to establish its global distribution network that comprises more than 500 locations in 63 countries. Without such an extensive distribution network it will be hard for new market entrants to present any real threat for IKEA.   Bargaining power of buyers in Porter’s Five Forces Analysis Bargaining power of buyers in furniture and home appliances manufacturing industry is huge. The following factors increase buyer bargaining power: 1. Absence of switching costs for customers. Currently IKEA lacks an ecosystem of products…]]> https://research-methodology.net/mcdonalds-porters-five-forces-analysis/ Wed, 22 Jun 2022 00:36:00 +0000 http://research-methodology.net/?p=7315 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. McDonald’s Porter’s Five Forces are represented in figure below: Porter’s Five Forces   Threat of new entrants in McDonald’s Porter’s Five Forces Analysis Threat of new entrants into fast food chain industry is moderate. Potential entrants into fast food chain industry have to deal with the following factors. 1. Massive capital investment requirements. Establishing a fast food chain requires huge financial investments to create an infrastructure, secure leases for locations, purchasing equipments and recruiting staff, among others. Securing funding for a new fast food venture can prove to be challenging taking into account high level of market saturation internationally. 2. Economies of scale. Major market players such as McDonald’s, Starbucks Coffee, Burger King, KFC and Subway substantially benefit from the economies of scale with positive implications on their cost structure. New market entrants, on the other hand, cannot benefit from the economies of scale to similar extend and this may prove to be a significant industry entry barrier. 3. Creativity and innovation. Despite fast food industry entry barriers such as huge capital requirements and economies of scale mentioned above, there is still a chance for new companies to successfully enter the industry. They can do so by innovating in terms of foods to offer, as well, as achieving greater technological integration into various business processes.   Bargaining power of buyers in McDonald’s Porter’s Five Forces Analysis Bargaining power of McDonald’s buyers is immense. The following set of factors, among others determines customer bargaining power in fast food industry: 1. No switching costs to competition. Customers can switch from McDonald’s to any other fast food chain such as KFC, Pizza Hut, Starbucks and Burger King with no…]]> https://research-methodology.net/amazon-porters-five-forces-analysis-2/ Fri, 25 Mar 2022 00:01:12 +0000 https://research-methodology.net/?p=7235 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. The essence of Amazon Porter’s Five Forces is represented in figure below: Porter’s Five Forces   Threat of new entrants in Amazon Porter’s Five Forces Analysis Threat of new entrants into online retail business is significant. The following sets of factors determine the threat of new entrants for Amazon’s industry. 1. Economies of scale. Amazon is the largest internet retailer and internet company by revenue in the world. The e-commerce giant operates more than 175 fulfilment centres worldwide in more than 150 million square feet of space.[2] Although potential new market entrants can copy Amazon business model, they cannot benefit from the economies of scale at the same extent as Amazon. Therefore, economies of scale can be specified as substantial barrier for new entrants. 2. Time of entry. The global market size for online shopping nearly reached USD 4 billion in 2020.[3] It has been estimated that e-commerce sales will surpass USD 740 billion by 2023 in the US alone.[4] Such an increasing popularity of internet shopping naturally attracts new entrants that will attempt to find new niches and competitive advantages. In other words, time of entry is an important factor that increases the threat of new entrants in global e-commerce. 3. Product differentiation. Amazon was able to reach its current position partly because it found an opportunity in online sales in 1994, when other companies didn’t notice or utilise such an opportunities. Likewise, other companies can find new previously unnoticed opportunities in e-retail to threaten the position of established market players such as Amazon, eBay, Alibaba and others. In other words, global e-commerce can be disrupted by start-ups that may find new sustainable sources of competitive advantage.…]]> https://research-methodology.net/square-porters-five-forces-analysis/ Wed, 29 Sep 2021 02:02:59 +0000 https://research-methodology.net/?p=58036 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. Square Porters Five Forces are illustrated in figure 1 below: Figure 1 Porter’s Five Forces   Threat of new entrants in Square Porter’s Five Forces Analysis Threat of new entrants into the fintech sector is considerable. The following points affect the formation of the threat of new entrants into Square’s industry. 1. Time of entry. Banking and finance is already being disrupted globally and Square has been at the forefront of changes. Nowadays it has become evident that the old ways of conducting financial affairs where businesses had to wait for days, if not weeks to get their loan applications reviewed and employees have to wait for several days to get their cheques cashed will become history soon. Accordingly, some entrepreneurs, as well as, many established financial institutions are currently realizing their own projects to claim their piece of pie in the formation of the new global financial landscape. 2. Expected retaliation from current market players. While there are many entities interested in participating in the formation of new financial systems, any new market entrant will face retaliation from Square. It has to be noted that Square even stood up against deep-pocketed behemoth called Amazon. In 2014 Amazon copied Square’s main product, card reader, undercut its price by 30% and offered free two-day shipping and live customer support.[2] In response Square increased its focus on the quality of its products and customer services. By the end of 2015, Amazon had to discontinue its Register card reader. 3. Legal and regulatory barriers. Finance and banking is one of the most heavily regulated industries worldwide. There are consumer protection laws, anti-money laundering laws, broker-dealer regulations, virtual currency regulations,…]]> https://research-methodology.net/uber-porters-five-forces-analysis-3/ Wed, 21 Jul 2021 00:11:46 +0000 https://research-methodology.net/?p=15546 Uber Porter’s Five Forces analytical framework analyses five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in figure below: Uber Porter’s Five Forces   Threat of new entrants in Uber Porter’s Five Forces analysis Threat of new entrants into internet-based ride-hailing sector is significant. The following factors play role in the formation and extent of the threat of new entrants into mobility platform sector: 1. Simplicity of the business model. Nothing about Uber business model or its app is secret. In other words, Uber business model and its app can be replicated by any other company without massive amounts of capital requirements. Thanks to internet-based nature of the business model, new entrants to the market will not have issue to access distribution channels. Furthermore, due to low entry barriers into the ride-hailing industry, the numbers of local and global competitors for Uber have been consistently increasing during the past few years. 2. Scaling issues. While addressing technical aspects of the business such as developing ride-haling app and website may not be difficult, achieving necessary scale in operations is challenging for new entrants. In other words, mobility platform has to attract substantial amount of drivers in order to be successful and this requires time and massive capital investments. 3. Expected retaliation from existing market players. Current market leaders such as Uber, Lyft and Curb defend their territories fiercely and they are expected to retaliate against new entrants to the market.   Bargaining power of buyers in Uber Porter’s Five Forces analysis The bargaining power of buyers in taxi industry is great. Buyer bargaining power depends on the following: 1. Abundance of offers. Buyer bargaining power is mainly fuelled by the abundance of competition in the industry. Uber customers are highly price sensitive. If…]]> https://research-methodology.net/tesla-porters-five-forces-analysis-2/ Wed, 28 Apr 2021 00:32:41 +0000 https://research-methodology.net/?p=26364 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. Tesla Porter’s Five Forces Analysis below contains the application of these factors to analyse the competitive environment for the alternative fuel vehicles manufacturer. Figure 1 Porter’s Five Forces Threat of new entrants in Tesla Porter’s Five Forces Analysis The threat of new entrants into alternative fuel vehicles manufacturing industry is moderate. The following factors play an instrumental role in the formation of threat of new entrants into electric vehicles industry: 1. Compromise between performance and cost of electric vehicles. One of the major challenges for electric vehicles is the bargain or compromise between their performance and cost. On one hand, almost all major automakers such as General Motors, Ford, Toyota, BMW and others have built electric cars that are not very expensive, but performance of these cars are compromised. Specifically, electric cars were known for being slower compared to traditional cars and their batteries did not last for long. On the other hand, Tesla has been able to develop its Model S, Model X and Model 3 cars that are fully electric and boasts with advanced technical characteristics such as high speed and long milage in a single charge. However, such fully electric advanced vehicles are technically challenging and expensive to produce. Any potential new market entrant is going to face the same set of challenges as General Motors, Ford, Toyota, as well as, Tesla. Taking into account the fact that established market players are yet to find solutions to these challenges, it can be argued that unless they find innovative solutions, the new market entrants are going to be overwhelmed by the same set of issues as well. 2. Economies of scale. Established market players…]]> https://research-methodology.net/w-w-grainger-porters-five-forces-analysis/ Thu, 20 Aug 2020 04:49:12 +0000 https://research-methodology.net/?p=44190 Porter’s Five Forces is a strategic analytical framework developed by Michael Porter (1979)[1]. The framework consists of five individual forces that shape an overall extent of competition in an industry. W.W. Grainger Porter’s Five Forces are illustrated in figure below: Porter’s Five Forces    Threat of new entrants in W.W. Grainger Porter’s Five Forces Threat of new entrants into traditional B2B distribution is not significant. Inter-relationships of the following factors determine the extent of threat of new entrants into industrial distribution: 1. Economies of scale. Economies of scale is a critical success factor in B2B distribution. Grainger purchases more than 1,7 million types of products from approximately 5000 suppliers worldwide.[2] Accordingly, Grainger benefits from the economies of scale to a great extent with positive implications on the cost structure of the business. However, new market entrants are not able to benefit from the economies of scale to a similar extent and therefore, economies of scale emerges as an important entry barrier to the B2B distribution industry. 2. Capital requirements. Industrial distribution is a highly capital-intensive business. In order to be successful and challenge established market players, new entrants need to have wide range of products stored in warehouses and distribution centres. Substantial capital investments are needed to achieve all of these and unless new market entrants do not come up with innovative business models to disrupt the industry, capital requirements are likely to persist as an important entry barrier to the industry. 3. Expected retaliation from existing businesses. Current market players in B2B distribution are likely to retaliate against any new entrants that possess a considerable threat to their market share. This is a noteworthy entry barrier for potential new entrants to the industry. For example, once Amazon Business started to become a formidable player in the global market of…]]> https://research-methodology.net/airbnb-porters-five-forces-analysis/ Sun, 15 Sep 2019 23:57:54 +0000 https://research-methodology.net/?p=39354   Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. Airbnb Porter’s Five Forces Analysis are illustrated in Figure 1 below: Figure 1 Airbnb Porter’s Five Forces 1. Threat of new entrants in Airbnb Porter’s Five Forces Analysis The threat of new entrants into pear-to-pear lodging industry is low. Theoretically, setting up a website should suffice to enter the industry. However, in practice there is a number of barriers to potential new entrants into peer-to-peer lodging industry. These include the following: 1. The time of entry. In e-commerce the role of the first mover advantage is usually paramount and it is usually very difficult if at all possible for the followers to even get close to the market disruptor. Once their business model proved to be viable, internet-based market disruptors such as Amazon, Facebook and Uber were able to gain large market share in the global marketplace in a short amount of time. Funding from investors, word-of-mouth, effective management and hype usually play an instrumental role in assisting e-commerce disruptors to secure their niche and strengthen their position in international markets. This was the case with Airbnb as well. Founded in 2008, the company became a leading global hospitality service brokerage company within a matter of a few years. As of summer 2019, Airbnb boasts More than 6 million listings in more than 191 countries and regions worldwide.[2] The word Airbnb became a synonym for peer-to-peer lodging, leaving little room and market for potential new entrants. Nevertheless, it would be naive to claim that the threat of new entrants does not exist. There is no limit on the numbers of times that a market can be disrupted and as such, any new company with another innovative idea…]]> https://research-methodology.net/microsoft-porters-five-forces-analysis-4-2/ Tue, 05 Feb 2019 00:46:15 +0000 http://research-methodology.net/?p=6590 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. Microsoft Porter’s Five Forces  are illustrated in figure below: Microsoft Porter’s Five Forces Analysis   Threat of substitute products or services in Microsoft Porter’s Five Forces Analysis Threat of substitute products or services for Microsoft is low. The following factors determine the level of threat of substitute products or services for the multinational technology company: 1. Lack of direct substitutes. Range of products offered by Microsoft include operating systems for computing devices, servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games; and online advertising. The company also designs and sells hardware including PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories. Additionally, Microsoft offers a wide range of software applications and cloud-based computing services such as Bing, Microsoft Azure, Microsoft Dynamics CRM Online, Microsoft Office 365, OneDrive, Skype, Xbox Live, and Yammer. There is no direct substitution for these products and services, however, indirect substitution exists. Indirect substitution for Microsoft products and services belonging to productivity and business processes segment include a wide range of stationary products, planners and organizers. Indirect substitution for Microsoft gaming and recreation products, on the other hand, include but not limited to music, movies, sports, spending time with friends and family members etc. 2. Low buyer propensity to substitute. The level of buyer propensity to choose substitute products or services to Microsoft’s products and services can be assessed as low. This is because according to its mission ‘to empower every person and every organization on the planet to achieve more’, Microsoft products and services are highly convenient to use.…]]> https://research-methodology.net/xiaomi-porters-five-forces-analysis-2/ Thu, 31 May 2018 00:51:48 +0000 https://research-methodology.net/?p=22779 Porter’s Five Forces is an analytical framework developed by Michael Porter (1979)[1].   Xiaomi Porter’s Five Forces consists of five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in Figure 1 below: Figure 1 Xiaomi Porter’s Five Forces   Threat of New Entrants in Xiaomi Porter’s Five Forces Analysis Threat of new entrants into the internet technology is low. There are entry barriers for potentially new market players. Economies of scale is one of the major factors and entry barrier for new companies. Xiaomi is able to offer its products for competitive prices because it purchases raw materials in bulk and benefits from the economies of scale to a large extent. Moreover, entry into the electronics and software industry requires formidable capital investments. Xiaomi was initially funded with USD41 million in 2010 and the company went through series of funding and debt financing of several billion USD to reach its current state.[2] It may not be easy for new market entrants to secure funding at such a scale to enter the industry. Additional range of factors that decrease the threat of new entrants to the industry include access to distribution channels and likely retaliation from existing market players such as Apple, Samsung, Xiaomi and Huawei.   Bargaining Power of Buyers in Xiaomi Porter’s Five Forces Analysis Bargaining power of buyers in technology and the mobile internet industry is significant. This is caused by primarily high level of competition in the global marketplace. Nevertheless, companies try to reduce buyer bargaining power through developing their ecosystem. For example, “all products belonging to Apple ecosystem are highly compatible with each-other and the purchase of one product belonging to the brand’s portfolio often leads to the purchase of other products. Gradually, it will come to the point that consumers…]]> https://research-methodology.net/samsung-porters-five-forces-analysis/ Tue, 10 Oct 2017 00:51:48 +0000 http://research-methodology.net/?p=6918 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. Samsung Porter’s Five Forces are represented in Figure 1 below: Figure 1 Samsung Porter’s Five Forces   Threat of substitute products or services for each product category offered by Samsung is substantial. Samsung smartphones can be substituted with ordinary mobile phones at any time with no additional costs for customers. Moreover, there is an increasing range of mobile and desktop applications that represent relevant substitute for Samsung’s mobile communications business. Samsung visual display business is threatened by indirect substitution such as increasing popularity of leading active lifestyle and spending time outdoor. In other words, representatives of Samsung target customer segment may prefer to spend time outdoors, rather than in front of TV with negative implications on the volume of sales of Samsung TV’s.  Furthermore, increasing popularity of cloud storage is emerging as viable alternative for printing and this tendency may decrease the sales of Samsung printing solutions products in the foreseeable future.   Rivalry among existing firms is intense. Approaching market saturation for many product categories in consumer electronics industry intensifies the rivalry among existing firms and there is a little differentiation among the range of products offered. Moreover, the great number and diversity of competitors operating in the market fuels the extent of competition in the industry. In smartphone market segment, one of its critical product categories, Samsung competes with a wide range of suppliers such as Apple, LG, Lenovo, ZTE, Huawei, OPPO and others. Nevertheless, as it is illustrated in Figure 2 below, Samsung has been able to maintain leadership position in the global scale for the last six years. Figure 2 Global market share by leading smartphone manufacturers[2]   Bargaining power of suppliers…]]> https://research-methodology.net/google-porters-five-forces-analysis/ Tue, 06 Jun 2017 00:03:58 +0000 http://research-methodology.net/?p=6670 Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. Google Porter’s Five Forces are represented in Figure 1 below: Figure 1 Google Porter’s Five Forces Threat of substitute products or services for Google is low. Search remains as Google’s and Alphabet’s core business and it is used by more than a billion people around the globe every day. The threat of substitute for Google’s search can be assessed as low because it remains to be the most convenient and time-efficient way of finding needed information. The threat of substitute products and services for Google’s other services is moderate. For example, people can use mobile text messages or mobile messengers such as What’s Up instead of using Gmail and traditional paper maps can be used instead of Google maps. At the same time, it is important to note that although, there are some direct and indirect substitutes for all Google services, these substitutes do not offer the same level of user convenience, functionality and speed. Accordingly, the threat of substitute products and services for products and services offered by Google can be generally assessed as low. Rivalry among existing firms is fierce. General purpose search engines and information services, such as Microsoft’s Bing, Yahoo, Yandex, Baidu, Naver, and Seznam represent competition for Google search. There are also vertical search engines and e-commerce websites, such as Amazon and eBay (e-commerce), Kayak (travel queries), LinkedIn (job queries), and WebMD (health queries). Some users will navigate directly to such content, websites, and apps rather than go through Google. Social networks, such as Facebook and Twitter also belong to the list of Google competitors. Some users are increasingly relying on social networks for product or service referrals, rather than seeking…]]> https://research-methodology.net/facebook-inc-porters-five-forces-analysis-global-leadership-in-a-competitive-market/ Wed, 11 Jan 2017 00:21:40 +0000 http://research-methodology.net/?p=9274 Facebook Inc. Porter’s Five Forces analytical framework assesses an overall extent of competition in the social media industry. Developed by Michael Porter (1979)[1] consists of five individual forces as illustrated in Figure 1 below: Figure 1. Facebook Inc. Porter’s Five Forces Rivalry among existing firms in social media industry is fierce. Alphabet Inc. (Google) is the most prominent competitor for Facebook and Google Adsense and Facebook Ads are two most popular competing platforms for online advertising. Generally, the major players in the industry include Facebook, You Tube, Reddit, Twitter, Instagram, Pinterest, Tumblr, LinkedIn, Yahoo! Answers, Yelp and others.  As it is illustrated in Figure 2 below, Facebook is the most popular social networking website in the US with an approximate market share of 42.4 per cent. Most popular social networking websites in the USA (as of August 2016)[2] The rate of the industry growth is immense, diversity within the competition is vast with no switching costs for customers and this fact further intensifies the rivalry among existing market players. Moreover, “there are several regional social networks, such as Renren in China, Mixi in Japan, vKontakte in Russia, etc., and these compete with FB for users in their respective geographies. Increased regulation in certain markets such as China is more beneficial to regional players”.[3] Threat of new entrants into social media industry is significant.  Although there are certain industry entry barriers such as capital requirements for marketing and expected retaliation from existing businesses, it is generally easy to built websites and mobile apps. New social media platforms based on innovative ideas and/or integrating innovative features can secure funding from investors to pose a threat to the market share of Facebook, Google+ and other established market players. Taking into account decreasing popularity of Facebook among teens,[4] it can be argued that a new social…]]>