The use of a porter’s five forces as a strategy in analyzing the development of a business
Background :
In a company, you want their company to experience development. But realizing this will be difficult if we don’t know what strategy to use in making this happen. However, with the use of the porter’s five forces, it can be used as a strategy in analyzing the development of your business. Starting from a business that has just started, even small to large ones can also use this porter’s five forces. This is because in each part in the porter’s five forces it represents the supporting factors of a business and also from these parts each side can be measured in units of low, medium, and high.
Literature :
David (2010:145), Porter’s five forces model of competitive analysis is an approach which is widely used in developing strategy across a variety of industries.
Porter’s five forces model was created in 1979 by Michael Porter, he is an expert and professor at Harvard University. The purpose of the five forces model is to describe a framework that is used as an analysis for the development of a business.
In the porter’s five forces, there are five parts that become an analysis in the development of a company are, Bargaininng Power of Buyers (Buyers Power), Bargaininng Power of suppliers (Supplier’s Power), Threat of Subtitute Product/ Service, Threat of New Entrance, and Rivalry Among Existing Competitor / Competitive Rivalry.
Source: https://thecimastudentdotcom.files.wordpress.com/2016/10/capture1.png
Example of porter’s five forces ( Campina Ice Cream Company )
- Competitive Rivalry
Although Campina ice cream has long dominated the market with a market share of 20% in Indonesia and not many competitors are very threatening but there are still main competitors, namely ice cream walls.
Ice cream walls entered Indonesia in the 1970s originating from England by Thomas Wall and are now part of Unilever.
Ice cream walls have a better strategy for maintaining loyalty by giving gifts.
- Threat Of New Entrance
Even though the consumption of ice cream per capita is small compared to other countries, newcomers cannot be avoided because the ice cream business is a profitable business in
Indonesia due to the growing and quite large number of young people, growing middle class, urban lifestyle and tropical climate.
- Buyer’s Power
Buyer power is determined by many factors and the main factor is buyer loyalty.
Buyer loyalty is one of Campina ice cream’s weaknesses and is not as strong as other brands such as Walls
- Threat of substitute product
Substitute products are indeed more popular with people and can be a threat even though they are popular with young people but there are many negative perceptions, and these substitute products are healthier, and the taste is not inferior and far different from ice cream.
- Supplier Power
the strength of the supplier depends on whether the material is easy to find or not. Campina ice cream raw materials are milk, chocolate, sugar, vegetable oil and others. for milk and chocolate raw materials they import their products, so these raw materials are difficult to find. but not all raw materials are imported, but there are also raw materials that are easy to find and do not need to be imported, such as sugar and vegetable oil.
Literature :
library.binus.ac.id. “ Microsoft Word – 2013-1-00250-MNBab2001.doc. https://library.binus.ac.id/eColls/eThesisdoc/Bab2/2013-1-00250-MN%20Bab2001.pdf.” Accessed January 06, 2021. Fransisca. “ PORTER 5 FORCES MODEL. https://sis.binus.ac.id/2018/02/21/porters-5-forces-model/. “ Accessed January 06, 2021.
Result and Discussion :
Fransisca. “ PORTER 5 FORCES MODEL. https://sis.binus.ac.id/2018/02/21/porters-5-forces-model/. “ Accessed January 06, 2021.
library.binus.ac.id. “ Microsoft Word – 2013-1-00250-MNBab2001.doc. https://library.binus.ac.id/eColls/eThesisdoc/Bab2/2013-1-00250-MN%20Bab2001.pdf.” Accessed January 06, 2021.