abhishreshthaa
Abhijeet S
MICHAEL E. PORTER’S FIVE FORCES MODEL
Industry Competitors:-
A larger number of firms increase rivalry because more firms must compete for the same customers and resources.
However since star enterprises has the largest technical setup in the western suburbs it beats the competition from local presses easily.
A low level of product differentiation is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry.
Here this point is not applicable to star enterprises since it has become a brand in itself.
Threat of Substitute Products or Services:-
Substitutes to the printing industry are almost negligible.
Bargaining Power Of Buyers:-
Buyers are Powerful if:
Current Situation
Buyers are concentrated - there are a few buyers with significant market share This is not so, in this case of industry, as there are many buyers and also many suppliers. But with respect to star enterprises the main buyer is Manikchand Group which has quite an influence on the company.
Buyers purchase a significant proportion of output - distribution of purchases or if the service is standardized. The service is not standardized but customized to consumers needs.
Buyers are Weak if:
Current Situation
Significant buyer switching costs - products not standardized and buyer cannot easily switch to another product The switching cost of the buyer is not much.
Buyers are fragmented (many, different) - no buyer has any particular influence on product or price True in the case of the industry. However again star enterprises is influenced by the manikchand group
Hence we can see that the buyer’s power is low.
However star enterprises have an influential buyer in the form of manikchand group. They may reduce the prices for them.
Bargaining Power Of Suppliers:-
Suppliers are Powerful if:
Current Situation
Credible forward integration threat by suppliers Major threat from ITC paper mills.
Suppliers concentrated The number of suppliers is decent. However ITC paper mills is the major supplier to the industry.
Significant cost to switch suppliers No significant cost incurred while switching suppliers.
Suppliers are Weak if:
Current Situation
Many competitive suppliers
ITC paper mills are the major supplier to the industry. Not many major suppliers.
Credible backward integration threat by purchasers It will prove very expensive for the printers to enter the manufacturing of paper industry.
Again the suppliers prove to be moderately effective. But ITC has the capabilities to control the prices to some extent.
Potential Entrants:-
Affecting factors
1. Government creates barriers.
2. Asset specificity inhibits entry into an industry.
The government creates barriers by providing more assistance to their own units.
The assets required for setting up an entire printing press is very expensive which again restricts potential entrants from this industry.
Problems and Recommendation:-
To work on the exemption of Octroi are charges because its one place where almost all the SSI’s are suffering.
Apart from that there should be some sort of provision made in the docks for speedy clearing of the machinery once imported.
Industry Competitors:-
A larger number of firms increase rivalry because more firms must compete for the same customers and resources.
However since star enterprises has the largest technical setup in the western suburbs it beats the competition from local presses easily.
A low level of product differentiation is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry.
Here this point is not applicable to star enterprises since it has become a brand in itself.
Threat of Substitute Products or Services:-
Substitutes to the printing industry are almost negligible.
Bargaining Power Of Buyers:-
Buyers are Powerful if:
Current Situation
Buyers are concentrated - there are a few buyers with significant market share This is not so, in this case of industry, as there are many buyers and also many suppliers. But with respect to star enterprises the main buyer is Manikchand Group which has quite an influence on the company.
Buyers purchase a significant proportion of output - distribution of purchases or if the service is standardized. The service is not standardized but customized to consumers needs.
Buyers are Weak if:
Current Situation
Significant buyer switching costs - products not standardized and buyer cannot easily switch to another product The switching cost of the buyer is not much.
Buyers are fragmented (many, different) - no buyer has any particular influence on product or price True in the case of the industry. However again star enterprises is influenced by the manikchand group
Hence we can see that the buyer’s power is low.
However star enterprises have an influential buyer in the form of manikchand group. They may reduce the prices for them.
Bargaining Power Of Suppliers:-
Suppliers are Powerful if:
Current Situation
Credible forward integration threat by suppliers Major threat from ITC paper mills.
Suppliers concentrated The number of suppliers is decent. However ITC paper mills is the major supplier to the industry.
Significant cost to switch suppliers No significant cost incurred while switching suppliers.
Suppliers are Weak if:
Current Situation
Many competitive suppliers
ITC paper mills are the major supplier to the industry. Not many major suppliers.
Credible backward integration threat by purchasers It will prove very expensive for the printers to enter the manufacturing of paper industry.
Again the suppliers prove to be moderately effective. But ITC has the capabilities to control the prices to some extent.
Potential Entrants:-
Affecting factors
1. Government creates barriers.
2. Asset specificity inhibits entry into an industry.
The government creates barriers by providing more assistance to their own units.
The assets required for setting up an entire printing press is very expensive which again restricts potential entrants from this industry.
Problems and Recommendation:-
To work on the exemption of Octroi are charges because its one place where almost all the SSI’s are suffering.
Apart from that there should be some sort of provision made in the docks for speedy clearing of the machinery once imported.
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