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Chemical industry analysis using Porter’s five force model

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Bargaining power of the buyers remains moderate, and there is less chances in increase or decrease in bargaining power, the factors affecting bargaining power are:

  1. Chemicals are the major inputs in the company.
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  3. Switching cost of the suppliers are more, because of long term agreements.
  4. The chemical products are not highly differentiated.
  5. The chemical industries have more end users.

Threat for substitute remains weak, and in long run varies with the demand, the major factors affecting the substitutes are:

  1. The buyers need the same type of chemicals for their usage.
  2. Changing chemical composition involves more R&D costs.
  3. Substitutes for the chemicals are rare.

The industrial rivals in the chemical industry is high, and have more tendency to increase, reasons beyond the high rivals are:

  1. High competition in gaining market share.
  2. Majority of the players are globally influenced
  3. Economics of scale is high, so more competition in pricing strategy
  4. Fixed costs are high, maintenance and existing cost are high.
Chemical industry analysis using Porter’s five force model essay

Related Questions

on Chemical industry analysis using Porter’s five force model

What are the five forces Porter recognizes in its industry analysis method?

The five forces Porter recognizes in its industry analysis method are: Intensity of competitive rivalry. Bargaining power of suppliers. Bargaining power of buyers. Threat of substitutes. Threat of new entrants. According to Porter, “the collective strength of these forces determines the ultimate profit potential of an industry.”.

What are the five forces analysis today in business?

These five forces analysis today in business world is also known as -Porter Five Forces Analysis. The Porter Five (5) Forces are - Rivalry among the existing players. Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition.

What are the factors affecting the supply chain of chemical industry?

4) Patent regulations. 5) Requirement of huge human capital, and research capital. Bargaining power of the suppliers can be seen as moderate, mall)Jar factors influencing the bargaining power of the suppliers are: 1) Chemical industry mostly depend of few large suppliers for raw material supply. 2) Substitutes are very limited.

What are the factors affecting bargaining power of suppliers in chemical industry?

Bargaining power of the suppliers can be seen as moderate, mall)Jar factors influencing the bargaining power of the suppliers are: 1) Chemical industry mostly depend of few large suppliers for raw material supply. 2) Substitutes are very limited. 3) Majority of the suppliers are not dependent in supply chain.

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