Michael Porter Five Forces Model

Paypal
1. Supplier Power
  1. 1) Limitless number of supplier
  2. 2) A potential supplier for PayPal is a person who wants do an online money transfer.
  3. 3) Suppliers wants protection for their items.
  4. 4) The suppliers as a whole do not have much power unless they are dealing with high end items.
2. Competitive rivalry
  1. 1) Faces competition in its marketplaces from both offline and online players.
  2. 2) high competitors - more companies competing with its services.
  3. 3) High rivals - Rivals located globally
3. Buyer Power
  1. 1) High number of customer
  2. 2) High size of order
  3. 3) Differences between competitors – can refund money on damaged online purchase
4. Threat of new entry
  1. 1) High time and cost entry
  2. 2) Economic of sale – transaction through online,store and mobile devices
  3. 3) Cost advantages – free, no annual memebership, no processing fees, no service charges
  4. 4) Technology protection – secure payment ecosystem, credit card security 5)Barriers to entry – low
5. Threat of Subtitution
  1. 1) Few substitute
  2. 2) Low cost of change
Google
1. Threat of new entry
  1. -Google is free
  2. -provide a variety of tools include cloud computing to help business save money and help organization to be more productive
  3. -CEO of google Larry Page describe google as the perfect search engine that understand exactly what you mean and give back exactly what you want.
  4. -easy to be hacked and no barrier
2. Supplier power
  1. -The bargaining power of suppliers is weak when there are many suppliers to choose from.
  2. -external factors are the ones that contribute to the weak effect of suppliers on Google:
  3. - High availability of supply
  4. - Large population of suppliers
3. Competitive rivalry
  1. -google offered their own product such as google maps,google scholar,google drive,google+ and so on.
  2. -low,although they have opponed such as Yahoo! and Bing
  3. - also offered Google business
  4. - customer are loyal
  5. - switching cost is very low
4. Buyer power
  1. -Google strong as the number of customers strong effect on google as they rely on advertising to gain profit by customers clicked on the ads.
  2. - Google is free in term of price sensitivity.
  3. -Google has strong features that make it difference from other search engine like Google Instant, horizontal scrolling list of current movies and “answer boxes”.
5. Threat of substitution
  1. - very low
  2. - cost of change possibly high since google is very powerful company
AirAsia
1. Threat of New Entry
  1. -Time and cost entry
  2. – Low specialist knowledge
  3. – Economic of sale – high
  4. – Technology protection – requires plane and flying experiences
  5. -Large cost advantages
  6. - Low barriers to entry
2. Buyer Power
  1. Low switching costs – costs of switching to other airlines is low Modern portion of expend buyer on airline
  2. No significant product differentiation – Air Asia offers to providing package including flight tickets, accommodation and travel guide for buyer.
  3. Market information will access by customers – Information is easy to access by customer only by click. Buyers have easy access to the information about airline services such as price and promotion.
  4. Modern portion of expend buyer on airline – bargaining power of buyer will strong if customer look for cheaper price.
3. Product Power
  1. Customer asy to switching to other airline – Flight path included more than one hundred cities and islands so it’s easily for the customer to look for alternative. Performance of competitors
  2. Performance consists of the accuracy of takeoff time, aircraft performance and staff services.
  3. Relative price – offers cheaper price to achieve profitability passenger loads.
4. Competitive Rivalry
  1. Number of competitors - stay same in the long time.
  2. Quality differences – large network to many destination and frequent promotion for the low ticket price.
  3. Switching costs – low Customer loyalty – high eg: joint venture with Tune Money (issue loyalty point t customers)
  4. Cost of leaving market –high (hard to leave the industry because the long term loan agreement)
5. Supplier Power
  1. Supplier concentration in a few hands – Dew to a few suppliers in market
  2. High switching cost – cost for employee training in operating the aircraft features is high.
  3. Relative insignificant influence of buyer to supplier- Air Asia is a small portion of Airbus customer who contributes only 2% from Airbus total order.

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Michael Porter Five Forces Model

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	Created by asmawanie93 over 8 years ago