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Rivalry among competitors
PORTER’S FIVE- FORCES MODEL
It is a model that describes competitiveness within an industry, which allows developing strategies, based on five main forces.
Rivalry is the most powerful forces of Michael Porter´s five competitive forces , it describes the relation and competition of firms , seeking successwithin a specific industry by successfully developing and maintain competitive advantage over its competitors.
Rivalry within the industry is high, by the fact that domestic cleaning organizations don´t present a specific competitive advantage on its service, is difficult to obtain competitive advantage since companies are similar in capabilities and on the development of a wonderful service priceless service. Thus customers can switch brands easily because there´s no competitive advantage that makes the chose a better option in the industry. Finally, the transition towards internet services has increased online domestic cleaning services, reducing costs by doing daily services and providing high quality services with excellent technology and the best personnel, increasing rivalry within the industry.
Potential development of substitute products
We are going to have to deal with potential development of substitute services, a similar service which could offer to customers, lower prices, better facilities, better marketing, among others.
In order to compete with those kinds of threats and to reach our vision (to be the number one option of housekeeping service for our customers), we need to create strategies that can help us to be more competitive against substitute services.
Bargaining power of consumers
The bargaining power of costumers in the market in which we are working on, is too low, because the costumers cant switch for another supplier of this kind of services, because the high quality service suppliers are few, by other hand, by the price they can find other options with lower prices, but the experience and the excellent service could not be found as if they take it with us.
Potential entry of new Competitor
As mentioned before , the macroeconomic analysis can see that the government is promoting the service sector , this has led to increased competition over time not only in the quality of service , but also provide lower prices better with home care equipment more modern. The potential of these new competitors into the market a lot of uncertainty about the performance of HOMIE since it does not know with how much capital these companies are entering the market and what kind of modern strategies are used, therefore it is our responsibility to monitor trends thus ensuring that the market impact of new companies in the market is lower, thus maintaining a competitive advantage in the long term.
Whenever new firms can easily enter a particular industry, increasing competitiveness.Barries like lack of technology, lack of expertice, strong customer loyalty, among others can restrinct the entry of new forms.Nevertheless,numeours firms enter within industrieswith lower cost and aoutstanding quality, increasing comptetiveness.
When customers represent a meyor force or buy in large,their bargaining power is a significant force affecting competition.Is the most important force affecting competitive advantage,being necessary to gain customer´s loyalty.
Firms can be in close competition with producers of substitute products from other industries.Competitive pressures arising from substitute products increas asthe relative price of these products decline,and customers can switch easily.
Michael Porter´s introduction and analysis are developed according to Chapter 3 The External Assessment, taken from:
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David, F. (2011). Strategic Management: Concept & Cases (15th ed.pp 65-67). Florence, United States : Pearson
Bargaining Power of Suppliers
The bargaining power of suppliers affects the intensivity of competition of an industry, especially when there is a large nunber of suppliers, when there are only a few good substitute raw materials, or when the cost of switching raw material is especially high.
The bargaining power of suppliers do not affect the industry we are working on because, we dont need any supplie we only need people that need work. But it can affect in the way that if we need some kind of electrodomestic or machine and we have only one it can be a trouble.