1 thought on “How to analyze the competitive situation of an industry?”

  1. Hello, I am very happy to answer for you
    In the eyes of some commercial investors, the best industrial analysis tools so far are the five -force analysis model proposed by American management master Michael Potter. It analyzes the attractiveness of an industry from the new entry threats (potential entry), alternative threats, upstream suppliers 'bargaining ability, downstream buyers' bargaining ability, and competitive intensity of enterprises in the same industry.
    For example, Luo Yonghao is a hammer mobile phone. After entering the mobile phone industry, he will compete with many existing industries, such as OPPO, Xiaomi, Huawei, etc. On the other hand, it is also necessary to face the threat of potential entryrs, such as some later starting. Brand peppers, mango mobile phones, etc. As a consumer, you may choose to use old mobile phones without using smartphones or use tablet computers. This is the threat of alternative services. To produce mobile phones, you need to purchase hardware such as the motherboard and battery. If the demand is large, it can be bargain with strength. If the supplier provides unique technologies and other suppliers cannot replace, the supplier's bargaining strength is strong, and the dominant power is more in the hands of the supplier. If the buyer needs a large number of purchases, the buyer's bargaining strength is strong. If the buyer purchases is the unique product of the company, the buyer's bargaining strength is weak. At the same time, if the buyer can produce the product by itself, the bargaining strength will also be enhanced.
    The emphasis on the role played and judging its bargaining strength, because any industry will have five forces to compete.
    . The threat of the entry of potential entry
    everyone wants to enter the industry and allocate cake allocation. As Marx said, if the profit reaches 50%, it will be crazy; if the profit reaches 100% It will prompt people to challenge the rules; if the profit can reach 300%, it will make people squeeze into the head, and the profit is a signal to investors.
    1. Enter the entry to divide the original market share to obtain some business. For example, Luo Yonghao's hammer mobile phone, although not an industry giant, will still divide the mobile phone market.
    2. Entry reducing the market concentration, thereby stirring the competition between enterprises and reducing the price-poor cost (profit).
    . The alternative threat of alternatives
    1. Direct product replacement. Replace one product with another product, such as changing Longjing to black tea.

    2. Indirect product replacement. That is, the two products have the same functions and are not directly replaced. For example, coffee instead of tea can refresh the brain, often threats from different fields. The Kodak Rolls have never thought of being replaced by mobile phones from the beginning to the end, and they have always been guarded by other companies in the industry.
    The high -value products in alternatives gain competitive advantages.
    . The ability of suppliers and buyers to bargain
    1. The concentration (market share) of the buyer (seller) or the size of the business volume:
    (1) The buyer's concentration is high, bargaining bargain strong ability. Mingchuang Youpin MINISO is essentially a modern version of "Ten Yuan Stores". Through a large number of stores, the purchase volume is large, and negotiated with suppliers to minimize the price. The selling price is very different, and its bargaining ability is very strong.
    (2) The concentration of suppliers is high and the bargaining ability is strong. The concentration is high, indicating that the product is excellent and high -quality, and the products produced are unique, such as lithography glue and chip. Huawei has no chip core technology before. , Huawei has a weak bargaining ability.
    2. The degree of product differentiation and the degree of specificity of the assets:
    (1) The supplier's products have differentiated products, and the bargaining ability is strong. For example, suppliers produce diversified products for consumers to choose from. Some products are high in pricing and weak pricing of some products. They can choose freely. The supplier's product is standardized and the bargaining ability is weak. If everyone produces ordinary masks, it can only increase its competitiveness by reducing prices. If a company produces both ordinary masks and N95 masks, the company's bargaining ability is stronger.
    (2) The supplier's product is highly dedicated and has strong bargaining ability. If the cigarette production line sells the tobacco companies produced to tobacco companies, there are not many cigarette production lines across the country, so the cigarette production line company has strong bargaining ability. Another example is that sewing machine companies, sewing machines and other enterprises have no different production, and the number of sewing machine companies is huge. It is a standardized and homogeneous product. The bargaining ability is weak and the customized product bargaining ability is strong.
    3. Vertical integration:
    (1) Integratedness: move closer to the raw material and supply side, and the bargaining ability is stronger. For example, automobile companies need a large amount of steel to build cars. If you have your own steel factory (raw materials), the bargaining ability is stronger.
    (2) Ahead of the way: move closer to consumers. If the steel company has the strength, you can marry the car company. If you don't care whether others buy steel, you can produce car novels by themselves.
    4. Information mastery: Buyers know more about market information. The more information is grasped, the more favorable positions, and the stronger bargaining ability.
    . The competition of existing enterprises in the industry
    , such as Didi and Uber, Meituan and Hungry, is a war in the industry for market share. Through price competition (such as Didla Capital to fight price war, issuing subsidy coupons), advertising warfare, product introduction, increased service to consumers.
    Any company to enter the existing industry will inevitably face the competition of existing enterprises.
    The limitations of the five or five -force model
    The limitations:
    (1) Static rather than dynamic. The market situation is changing rapidly, and it is new every day. Maybe the dangers facing today will become the opportunity of tomorrow. It is to analyze the company's current static situation.
    (2) Not suitable for non -profit organizations. Non -profit organizations are not to seize the market, but to benefit the society and provide more welfare help, so it is not applicable.
    (3) is an ideal state. It belongs to the static situation, and it is often based on a subjective thinking in the current situation.
    (4) Strategic makers cannot understand all the information of the industry. Any industry has information asymmetry. Although it is a senior industry person and entrepreneurs, it is impossible to understand all the information of the industry, such as the composition of raw materials and preferences, etc. Long -term cooperation (cooperation is not based on cost and market position). When the cooperation of any company faces the conflict of interest (such as uneven interests), the cooperative relationship will break
    (6) incomplete consideration of the elements of competitiveness.
    The more exciting content, follow the classroom accounting.

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