Porter’s Five Forces Analysis
The growth of the U.K vacuum cleaning industry has led to the emergence of companies, including Beko, Samsung, Bosch, and Hoover, which seek to take advantage of the business opportunity. These enterprises have introduced new technologies that have increased competitiveness in the industry. Other threats that the new entrants pose are; increased alternatives, production of cheap products, and augmented the demand for skilled workers in the market.
The advancement of technology has encouraged the emergence of new products in the industry. Many companies, including Dyson, ensure creativity in their production process to facilitate the manufacture of alternative vacuum cleaning machines that are more advanced than those of other corporation. That way, they ensure that their products meet the needs of customers.
The industry has highly differentiated products that vary in patent, technology, and design hence customers a have high bargaining power. Most of the clients are price sensitive but willing to spend more on quality and highly effective products. Consumers may switch retailers based on creativity and ability to design better products.
Suppliers have low bargaining power in the industry. They usually sell their products in small quantities due to the high level of uncertainty of the markets. Many of the firms in the sector have unpredictable production patterns thus making them unique thus disadvantaging suppliers.
Many corporations have increased their creativity and research on new production methods. As such, there exists an intense rivalry within the industry not only in formulating alternative strategies but also developing new designs. The fierce competition implies that enterprises have to keep reinventing their products to remain relevant and increase their profit margins. The organization in question thus needs to keep reinventing.
- Dobbs, M. (2014). Guidelines for Applying Porter’s Five Forces Framework: A Set of Industry Analysis Templates. Competitiveness Review, 24(1).