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Porter's Five-Forces Model of Competition

RIVALRY AMONG COMPETING FIRMS

 

As Park (2011) says, “It is the nature of competition that firms will strive for advantage over their rivals. As such, rivalry is typically the strongest of the five competitive forces in any given industry. It can be defined as the competition that goes on between firms as they try to increase their market share…. Many cooperatives find themselves competing for the sale of outputs in addition to competing for the participation of their member-owners. Some cooperatives have a supply relationship with their members, some have a customer relationship with their members and some have both.”

 

The competing company of BottleFit is My Bottle, both firms offers to the consumer bottles with an unique appearence searching that the product become a tendence in worldwide. Another competitive aspect is that the companies helps to take care the environment reducing the spend of plastic bottles that now a days are used large quantities.

 

Reference – Park. J (2011). Rivalry among existing competitors in the industry. Available in: http://articles.extension.org/pages/30417/rivalry-among-existing-competitors-in-the-industry

 

 

 

BARGAINING POWER OF SUPPLIERS

 

Knowing that as a small company, we will start not by manufacturing our products (raw materials), but by buying them, we will have a close interaction with our suppliers.

However, according to Porter’s Five-Forces Model, suppliers might have some advantage in the market, that is why it is very important to have well-built alliances with ur suppliers.

Some of the advantages mentioned are the ability to increase prices even without seeing any repercussion on the sales. And also, even if in some countries it is illegal, some suppliers find its way to create either formal or informal agreements to establish a product’s price. So that is why as a company, we must be really careful on choosing suppliers and building alliances within them.

 

References: Power of negotiation. http://www.5fuerzasdeporter.com/el-poder-de-negociacion-de-los-proveedores/

 

 

POTENTIAL ENTRY OF NEW COMPETITORS:

 

The research about the plastic bottles risks for human’s health and environmental damaging having being changing people’s mind about using this kind of products. That’s why some governments have changed their policies about this kind of products and banned their commercialization.

 

Despite that, according to the firm Raddar in Colombia, the water market is growing at 11% annually and is worth about $ 240 billion pesos a year. The same analysis shows that the average consumption of Colombian has risen from $ 206 a month to $ 484 in just 10 years.  (El Espectador, 2009)

 

Also, in 2011, according to Raddar, there were sold more than US $ 176 million in water bottles, and Colombians consume 15.5 liters per capita.

 

This means that the water bottles market in Colombia has been increasing people do not care much about the environmental or health damages, because they think that the water bottles are “healthier”.

 

This increasing in the water bottles markets unleashed a new trend for the flavored water and the functional water or drinks, increasing the consumption for this kind of products and therefor for the plastic bottles.

 

This is why we can conclude that the potential entry of new competitors for the bottle’s market is not high, because there is a trend for the water bottles, the other kinds of flavored waters, and drinks that are packaged in plastic bottles.

 

References:

 

 

 

POTENTIAL DEVOLPMENT OF SUBSTITUTE PRODUCTS:

 

In our business competition with producers of substitute products is very intense, plastic and glass containers are alternatives for customers to choose from, specially for our product, the stain Steel bottle, as there is more developing investment in substitute products there is more the competitive pressure and as prices decrease and as our product is the more expensive customer can switch to cheaper options. Our company must look forward to reduce cost production and be more competitive to get the profits we need to do, to continue developing better alternatives to get better products and better prices for the market.

 

BARGAINING POWER OF CONSUMERS:

 

The bargaining power of consumers refers to the pressure that consumers can have on companies to get higher quality products, improved customer service, and lower prices are offered. (http://www.5fuerzasdeporter.com/, 2015)

 

Considering customers as a factor that increases the competitiveness in the market. BottleFit as a company seeks to manage this bargaining power presenting the best quality in the products we offer, knowing that adversely does not affects the health and helps the environment. We also offer a variety of personalized designs, making our clients feel that they have something of their own and unique. We seek to follow what customers want, follow trends and improve them, giving them a way to easily access our products at an affordable price and to satisfy customer needs in terms of what they   want in a product. This gives us a competitive advantage, because we want to give a different current trends such as: lead a life of fitness and care for the environment, which is very important.

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