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COMPETITIVE ANALYSIS: PORTER’S FIVE- FORCES MODEL

 

Poters five forces model it is to make a deep analysis of the competitive forces  to develop strategies that will be used in different industries properly, this  strategies will have more success probaliidad to bring to the industries because previously the industry developed a alalisis of external factors and based on that they apply and formulate these strategies.

 

 

The five forces model are:

 

-Rivalry among competing firms.

-Potencial entry of new competitors

-Potential development of substitute products

-Barganing power of suppliers 

-Barganing power of consumers

 

 

(s.f.). Recuperado el 19 de 02 de 2015, de Hubpages: http://dommcg.hubpages.com/hub/Porters-Five-Forces-Model-For-Competitive-Analysis

 

Rivalry among competing firms

 It is the most important force of the five competitive forces because it is what gives a industry a competitive advantage over the others. Competitive advantage is obtained by the industry collecting information on the competition to overcome in quality, prices and strategies.

 

In industry and more specific in the beauty industry was developed a study that said that the beauty industry the last year $ 600,000 million was used in this industry which is very positive in our case.

 

A Colombian average person spends about $ 960,000 a year in the beauty industry according to a study by the magazine "Dinero" consequently we can afirm that it is very viable this industry.

 

In the oder hand, about the competition that exists in the country of our industry we can say that is big but the approach we have as a company would be a competitive advantage over other companies because the otres firms has an approach primarily in adults.

 

Some of the strategies we could implement to gain a competitive advantage in the market would be the following:

 

  • Have the best quality in customer care.

  • Publicity

  • Good prices

  • Have the best hairdressing service focused in children

Potencial entry of new competitors

Industry is unstable in the sense that external factors are always changing, possibly new competitors are going to enter in the market and old competitors will come out of the market.

 

New strategies must be made and implemented to counteract the impact of new competitors, to formulate these strategies is necessary to obtain information from new competitors and we can monitor the new rival firms strategies to get more information about the rival firms.

 

To develop the strategies previously announced, we should identify gusts and weaknesses of the competition and how we can overcome the strategies of rivals firms to succeed and survive in the industry.

 

The threat of new entrants firms in the industry is possible because as can be denoted in the study conducted by the magazine "Dinero" because there was a significant increase in the consumption of these services and more in particular in the beauty industry.

 

To resconder to threats of new competitors in the market we can do or implement the followings strategies:

 

  • Increase the number of stores in different geographical areas

  • Cut prices

  • Increase publicity

  • Implementing new technology

  • Possession of patents

Potential development of substitute products

In this case we are going to talk about substitute services because our firm is in the service industry. Substitute services are services that a firm generate similar to another service companies so if the other firm with the same service has better service quality, lower prices and greater publicity this may affect our company because consumers will prefer the other firm so we have to be informed about substitute services companies to develop strategies that can counteract the impact of substitute services firms and be pioneers in the industry.

 

Moreover, the substitute services companies, must be careful with the price of the services that they are offering to the consumers because they will always have the tend to acquire the service with a lower price on the market then companies should be informed of prices on the market.

 

Substitute services  in our industry principally are the followings:

 

  • I love Tokio Couture

  • D Norberto peluquería

  • La Peluquería

  • Marco Antonio Peluquería

  • Hair mansion Peluquería

 

We note that in the beauty industry is a lot of competition therefore our company should stand out by the approach we have and implement strategies that will be able to carry us to survive in the market.

 

 

 

Barganing power of suppliers

It is an important factor for the firms because most of the firms need suppliers to make work their company.

 

If there are many suppliers in the industry it is going to be something positive for the diferent firms because suppliers wouldnt control the prices of their services because it is going to be conditioned by consumers demand.

 

On the other hand, if there are few suppliers in the industry, it would be negative for companies because this way the providers will control the prices of their products and will be more difficult to find good prices on the market.

 

Companies must have a lot of information of all providers who are in the area so in this way can firms can choose the best price with best quality, sometimes is better to import the products because like this we will have a good price.

 

 

Barganing power of consumers

It is an important factor for the firms because the consumer are essential in the industry.

 

Consumers determine purchase volume that a company will have, income of the firms, utilities of the company, the success of the company is demonstrated in customer satisfaction and other factors.

 

Consumers are very important in firms and to keep them as customers of our companies we must satisfy them and for achieve this we should implement the following strategies:

 

  • Have a differentiation in our service

  • Offer the best quality possible

  • Provide promotions in our services

  • Have good communication with the client

  • Customer satisfaction

 

 

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