So what happens when you go into business? You should be armed of the necessary information of the market you are in. And I always believe in the advantage side of the trainings and education of management for it is here that you get more theories that will help you on applying strategically all of the lessons and techniques.
And since I have not been able to educate myself with more of the management stuffs and learning, it was not familiar to me the Porter’s Five Forces until being discussed in the group. It was an interesting topic I say, as it discusses the survival techniques in the business. Did our company able to apply these in reality? Uhmmm let us check and evaluate.
First stop is the bargaining power of buyers. They said that the buyer has more power than the company if the company is new, has greater number of competitors for the same products or services, and the high significance of the clients to them. Having been in the business for more than twenty years and has a number of existing clients, I say that the company has power over the new clients. Offering them our products and services may not let them bargain over us. Although I can sense that the more significant our existing clients are, they can have the power to bargain. Significant clients, for we know are those that give us higher profits and so we don’t want to lose them. And yes, sometimes when our systems suddenly don’t work as they were supposed to be and that they get disappointed or frustrated over us, the sales and support team will bargain over them.
Second stop is the threat of new entrants. This is an exciting part of the threat, I guess. Putting ourselves as clients, this is an advantage to us. We get to receive freebies, lower rates, new services or products offered, and many more from a new business sprout against the existing ones. This is because the new entrants will always want to get the attention of their target audience and may steal the customers of their competitors. Switching this back as an organization, how should we able to counteract this competition? I have been in a project for an integration with a 3rd party software vendor and I heard that they were creating a program just like ours. This is a big company too we are integrating but once they launch the software like we have, we may lose a bunch of clients. So in this case, our company created a system similar to theirs to counteract their plan.
Third stop is the power of suppliers. In this case I don’t know what suppliers do we have. For office equipments and any others, I think the company has no suppliers to choose from since we are small in different geographic locations. But I guess on buying domain and servers, the company has greater selection of suppliers that can cater huge number of requests.
Fourth is the threat to substitute products or services. I know we have a lot of competitors offering the same products and there might be others out there too with lesser features at a lower cost. This is a threat for us if our clients are not using the full features of the system. They can actually move to other vendors with just the functions they have at a reasonable price. But for those clients that have fully used the features, especially purchased the suite, I think we still have edge on this.
Lastly is the rivalry amongst existing firms. This may be the most difficult threat that should be handled and planned well. Competitors are always on the lookout to steal clients. And so, other than increasing the kind of customer services we are offering, we participate in fairs to advertise products. Right now, I heard that the company is offering one product (system) for free if they purchase one big product we have.
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