5 Industry Forces
Competition is all around us. This can be in the form of sports, popularity, achievements, and also in business. We are constantly being bombarded with advertisement on top of advertisement where some brand or company is trying to make us believe that theirs is the biggest and best, the one we’ve been missing. Beyond the radio ads and TV commercials are the main competitive forces behind that competition and that is what I would like discuss in the next few paragraphs. Before I go specifically into the world of Sony electronics, I am first going to define in general the 5 competitive forces in industry. At the center of it all are the Industry Competitors. Next, there is the Threat of New Entry, which puts pressure on prices, cost, and the rate of investment necessary to compete. There is also Power of Suppliers which captures more value by charging higher prices, limiting quality or services, etc. In contrast, the Power of the Buyer captures value by forcing down prices, demanding better quality, etc. Along with these forces is also Rivalry among Existing Competitors. . Sony Corporation has over 150,000 employees and gross’ around 64 billion dollars in sales each year. Obviously they are doing something right! Although Sony is a very popular brand and is considered to be one of the best, they are not without their competition. Industry Competitors include Samsung, Sharp, and HP. One of the things that helps Sony stay successful is that the Threat of New Entry is low. This in part is due to the economics of scale, product differentiation, and also government policy. In terms of the Bargaining Power of Suppliers, because management chains are not very concentrated and the fact that suppliers are constantly being forced the cut their prices to stay in business, this category is also low. Now we come to the high end of the scale with the Bargaining Power of the Buyer. This competitive force is rated rather high due to the fact that there is little
Cited: Asad, T. (2013, March 19). SlideShare. Retrieved November 5, 2013, from The five competitive forces that shape strategy: http://www.slideshare.net/tahiaasad/the-five-competitive-forces-that-shape-strategy-17364247 Werner, R. O., & Knapp, R. W. (Summer79, Vol. 43 Issue 3). REGULATION OF CHANNELS OF DISTRIBUTION. 107-108.