Porters 5 Factors over Destiny

The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into.

With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. Destiny 2000ltd is the fastest growing & biggest network marketing company in Bangladesh. It is also one of the top 10 (ten) largest Direct Selling Company among the world. They distribute skin care products, electronic products named D2K and they have many sister concerns as well. By using Porter’s Five Forces I would like to analyze five competitive forces in network marketing industry in Bangladesh.

1. Threat of Entry: Regulation of governmental barrier which is mainly applied to foreign companies & companies with low budget is a great positive point for Destiny 2000ltd. Though it’s not really an easy job to get a MLM license from the government. Still there are possibilities of new competitors as this sector will get government a good amount of tax every year. So, the pressure of threat is situated between safe and danger zone.

2. Threat of Substitution: Skin care, Health care & Electrical products like T.V, Washing machine, DVD player, Refrigerators can be purchased from a regular non-network marketing company which can be of higher brand values, cheaper rates & can be better in quality. Besides this, from a regular store anyone can buy other products but here in this sector you are selling just a typical type of product which customer may find not interesting. As you are not playing monopoly, customer may choose the same skin care product from a different network marketing company & it’s obvious you don’t have the full control over customers as substitute products are available in...