As a consumer, we have a power to choose a product that we want to buy. The power will become high if we have many choices and low when our choices are few. If the company want to reduce a buyer power, it must make their product more attractive to buy from their self not from competitors. Nowadays many company will choose the best alternative such as IT- based to make it easy to their consumer. As we can see, once upon the time, the MAS airline became a monopoly airline company, after the Air Asia existence and they introduce the booking on-line ticket system that used the IT-based, the MAS airline became crashed.
2. Supplier Power/ Bargaining Power of Supplier.
It is vice-versa with buyer power which is their power is low when customer have many choices and high when they have few choices. For example, business to business marketplace, private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who could care to bid such as www.mudah.com. Reverse auction is an auction format in which increasingly lower bids.
3. Treats of Substitute Products and Services
Threat of substitutes product and services will becomes high when there are many alternative to a product or services and low when there are few alternatives from which to choose. For an example to travel in country there are many transportation that we can choose such as air plane, buses, train and others. Besides in new era many product smartphone that customer can choice. For example for Samsung use an android n Iphone use an ios in their operating system. .
4. Threat of New Entrants
When to many competitors produce the same product or enter the market and it will barriers to enter the market or to compete with others company. If there were has many same product in the market they will might faces difficulties to compete with others competitors. Nowadays to many smartphone in market such as Blackberry, Samsung, Apple and others. This company will face difficulties to compete with each others. every product has their own speciality and customer will buy if the product are satisfied them or fulfil their criteria such as an iphone are known and special in touch-screen phone.
5. Rivalry among existing competitors.
There will high when competition is fierce in a market and low when competitors are more complacent. although competitions is always more intense in some industries that in others. The overall trends is toward increase competition in almost every industry. e.g: the airline industry faces serious threats from airlines operating in bankruptcy, who do not pay on the debt while slashing fares against those healthy airlines who do pay on debt. ( MAS & AIR ASIA)
good answer
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