Courts Analysis

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Date Submitted: 03/16/2009 01:45 AM

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Porter’s Five Forces '' A model for Industry Analysis

1. Rivalry

2. Threat of Substitutes

3. Buyer Power

4. Supplier Power

5. Barriers to Entry/ Threat of Entry

1) Rivalry (High in the industry)

• Competitors: Ikea, Harvey Norman, Best Denki, Carrefour

• Furniture Industry: Mainly Ikea, which is a worldwide known brand and being able to offer certain types of furniture at cheaper prices, appealing to the masses. Faces competition from other stores that sell furniture especially because of the location and other factors

o Rivalry quite high between the mega stores since the Courts Mega Store is situated next to the Ikea store at Tampines

• Electronic Appliances: Harvey Norman and Best Denki, more known for places to purchase them

o Rivalry also high in certain places where the stores are near to each other, e.g. Funan IT Mall

• Products sold by competitors are almost the same except for some slight differences in the suppliers and brands. Therefore it actually competes quite heavily on marketing strategies such as pricing and promotions to attract consumers

• Competitive advantage can be easily eroded because any new strategies can be followed by competitors easily

2) Threat of Substitutes (High within industry but low between industries)

In Porter’s model, substitute products refer to other products in other industries.

• No threat of substitutes from other industries. Cannot replace the need for furniture and electronic appliances.

• However, if we compare within industry among the competitors, threat of substitutes for COURTS’ products is high because the consumers can easily switch between the products offered in the industry by the competitors.

3) Buyer Power (Moderately High)

The buyer power is the power that buyers have in influencing the industry.

• There is a presence of a substantial amount of buyer power because consumers can easily switch to buying from its competitors if the price and value...