This is a threepart question 1 Describe the five forces that

This is a three-part question: 1) Describe the five forces that determine the intrinsic attractiveness of a market or market segment, 2) Discuss the two different approaches commonly used in identifying competitors for a product or service, 3) Briefly analyze some of the strengths and weaknesses of two competitors in the same industry of your choice (e.g., Coke and Pepsi or McDonald’s and Burger King).

Solution

The five forces that determine the intrinsic attractiveness of a market or market segment are as described by Micheal E Porter. They are as follows:

- Threat of new entrants- The profitibility of a product is directly effected if a new product having the same features enters the market. There is a higher risk if the price is lesser or quality is higher. If any of these features are not implied on the new product, still the customers may want to try that is new in the market and may have a likibility towards it also.

- Threat of substitution- This threat refers to the use of products that can be substituted and are lesser in price or easily available or easier to be used. Such products can effect the use and profitibility of a particular product.

- Bargaining power of buyers- This factor depends on the number of buyers and their capacity to bargain on the prices of the products. If a large number of customers are able to bargain on a product, it will effect its productivity and profitibility.

- Bargaining power of the suppliers- The suppliers product uniqueness and demand also is a threat for the product in the market. The size and strength of the supplier, to what level they can bargain without an effect on their supply and profits and the cost in changing from one supplier to other defines the position of the product in the market.

- Rivalry in existing competitors- This is the competition in the market making the product less attractive for the customers. If the product competitors are is large number or capability to compete with the product it decreses its demand and effects the position of the product in the market.

2. The two approaches commonly used in identifying competitors for a product are industry approach and market approach. The industry approach refers to the structure of the industry of the product, studying the market competitors offering the same kind of product. The market approach is analyzing the customer needs, their power to spend on the product and mind set to switch to a substitute or competeting product. Basically the industry approach analyzes from the competitors viewpoint and market approach analyzes from the customers viewpoint.

Industry itself defines the group producing a similar type of product that can compete with each other or substitute each other. Making a study of such products to make a marketing strategy for our product is the industry approach of production.

In the market based approach the firm studies the competitors that supply the products which satisfy the same type of needs of consumers. The competitions faced in this approach are based on brand competition, product competition, industry competition and generic competition.

3. Analysis of strengths and weaknesses of two competitors namely- Dominos and Pizza Hut (pizza companies) are as follows:

DOMINOS-

Strengths:

- more number of outlets

- Home Delivery time is less than 30 minnutes

- Quick services given at the outlets

- Customer satisfaction

-good promotional offers

- Reasonable price

Weaknesses:

- less variety avalaible

- small area of outlets

- not very high grade ambience

- no facility of arraging parties and group celebrations.

PIZZA HUT

Strengths:

- Good variety and quality

- Strong brand image

- Excellent customer service

- hygenic and stylish ambience

- customer satisfaction priority

Weaknesses:

- Less advertisment

- less number of outlets

- Price higher than competitors

- no parking facility at outlets avalaible

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