Industrial forces case study examples

– Competitive rivalry
– Moderate power
– Product differentiation is low between Gentex and its competitors
– Growth is slow
– Fixed costs are high
– Overcapacity of parts
– Lack of brand identity of the company.
– The absence of switching costs among the company’s products
– Buyer power
– A low number of potential buyers therefore increasing their buying or bargaining power.
– Lack of favorable buyer incentives
– Large volumes and sizes of customers orders of the auto parts that increase or raise their power
– Threat of backward integration that increases the buyer’s power
– Threat of substitutes
– Presence of other auto parts products that match the performance and price of Gentex company
– Gentex’s customer’s willingness to migrate or switch to other products or substitutes
– Lack of switching costs that may encourage the customers to start using auto parts from other producers.
– The inclination of the buyer towards the substitutes from other companies competing with Gentex
– Threat of new entrants
– The barriers that inhibit the entrance of other producers to the auto industry markets are minimal.
– Lack of legal and regulatory restrictions in the industry
– Large cost units that make it relatively easy for new entrants to enter the market and attain a significant market share.
– Lack of retaliation techniques from Gentex Company to counter the threat of new entrants.
– Wide access to distribution and supply channels by the new entrants therefore enabling them enter into the auto parts market in a relatively easy way
– Supplier power
– Small number of suppliers that supply raw products to Gentex thereby enabling them to have high supply power.
– High switching costs between suppliers
– The threat of suppliers to engage in vertical integration
– Wide input differentiation between alternative suppliers
– A relatively large effect of the inputs on the differentiation of products and their cost

Works cited

Porter, M. E. The Five Competitive Forces That Shape Strategy. Harvard business Review. 2008.
Kotner, Wesley. Marketing Strategy. Oakland, CA: Stanton Publishers. 2011.