5 forces analysis
Case study
1. Complete a five forces analysis.
Five Forces is a framework of an industry analysis developed by Porter. These five factors help to evaluate the strength of competitive forces and industry profitability. In this part, Porter’s Five Forces theory will be applied to analyse the Inuit case study.
Inuit is a well-known financial-software and service firm founded in 1983 by Scott Cook and Tom Proulx. When entering the market, Intuit was still a small business software and it had to face with Microsoft, a big mogul, in this potential software industry. However, in general, this market was stable and not has many competitors. At this time, Intuit gave simple financial solution tools for small business market segment but not compete in price. Quicken, their first simple accounting software, soon became the best-selling product on this market. After that, another chain of success of QuickBooks and TurboTax and a tax preparation software program brought 70% market share for Intuit in 1995.
One of Intuit’ substitutes came from Microsoft Money software. Microsoft used its brand power to dominate this potential industry and competed for 18 year but it ended with the victory of “young” Intuit, which brought a big opportunity for the winner. Intuit is very successful in viral marketing when they consider this is the most effective tools.
Although holding a big market share, Intuit still expands its software application to mobile devices by acquiring companies like Mint.com website in 2009. It is likely that there is no other firms in this industry can be important enough to affect Intuit price or output so it has a strong bargaining power and its products are doubled in price compared to competing ones.
However, fast-paced development of technology and the entrance of other new competitors (HRB, SAP AG, IBM, etc) started increasing the bargaining power of buyers (e.g. Intuit’s stock declined 70% in 2 years from 1995). Consequently, Intuit had to conduct
1. Complete a five forces analysis.
Five Forces is a framework of an industry analysis developed by Porter. These five factors help to evaluate the strength of competitive forces and industry profitability. In this part, Porter’s Five Forces theory will be applied to analyse the Inuit case study.
Inuit is a well-known financial-software and service firm founded in 1983 by Scott Cook and Tom Proulx. When entering the market, Intuit was still a small business software and it had to face with Microsoft, a big mogul, in this potential software industry. However, in general, this market was stable and not has many competitors. At this time, Intuit gave simple financial solution tools for small business market segment but not compete in price. Quicken, their first simple accounting software, soon became the best-selling product on this market. After that, another chain of success of QuickBooks and TurboTax and a tax preparation software program brought 70% market share for Intuit in 1995.
One of Intuit’ substitutes came from Microsoft Money software. Microsoft used its brand power to dominate this potential industry and competed for 18 year but it ended with the victory of “young” Intuit, which brought a big opportunity for the winner. Intuit is very successful in viral marketing when they consider this is the most effective tools.
Although holding a big market share, Intuit still expands its software application to mobile devices by acquiring companies like Mint.com website in 2009. It is likely that there is no other firms in this industry can be important enough to affect Intuit price or output so it has a strong bargaining power and its products are doubled in price compared to competing ones.
However, fast-paced development of technology and the entrance of other new competitors (HRB, SAP AG, IBM, etc) started increasing the bargaining power of buyers (e.g. Intuit’s stock declined 70% in 2 years from 1995). Consequently, Intuit had to conduct