Five Forces Analysis-US Express Mail Industry Essay

The following analysis of Porter’s 5 Forces Model will help in determining the threats that my be present now or in the future and help determine opportunities and decisions regarding the marketing plan.

To assess the industry structure and profitability, a Five Forces analysis will be conducted on the department store-retail industry.

The overall threat of new entrants in the retail market is a high level threat as it is relatively easy and inexpensive to enter

Threat of new entrants is relatively low. There are high barriers to entry in the discount retail market, including high capital costs, limited access to investors, and a largely crowded-out market place.

In the US Express Mail industry, the buyers fit into two segments: businesses and individuals. Express Mail has become the industry standard in some industries such as banking, consulting and financial services since the items inside the package had a high ratio of value to weight. Businesses needed to be able to track the packages and be assured that it arrives on time. That being said, businesses were often high-volume buyers since the shipping managers identified which firm to deal with and concentrate the high-volume of shipments to that firm for a particular project or for the time being. Sales representatives from the firms had to negotiate with stingy shipping managers who sometimes demanded the upwards of 50% or more discounts. The existence of many large volume buyers meant that the buyer power is high. Similarly, individuals also held high buyer power since the Big Three and other second-tier postal services offered largely undifferentiated services.

a) Economies of scale—the top three carriers (Federal Express, UPS, and Airborne Express) serve slightly more than 85% of the domestic express mail market. All three carriers deliver a high volume of packages, and thus, are able to spread fixed costs over more units. Also, each carrier has integrated technological systems that improved operational efficiency. In addition, intensive training programs of employees increase service and delivery efficiency.

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

Threat of entry is low because it requires large capital investments for a firm to startup and thus it can impede the entry of new firms into the industry. Lastly, it would be hard to break into the industry because the other firms already have economies to scale, are further along learning curve, and may have certain airspace leases that blocks out the new company from potential routes.

Porters five forces will help us in analyse the industry amazon.com is in. Five Forces which will be analysed will be

FedEx’s external environment both positively and negatively affects the organizations operations. Their external environment consists of government, weather, and the economy. FedEx does not have a very large external environment because their operations are not affect by many outside sources.

Porter’s 5 forces analysis is an important framework that helps understanding both the strength of the current competitive position and factors affecting the strategy development of the company. It tells us where the power dwells in the business situation. However, we will use the PESTLE analysis in this paper because it is a very useful framework to business leaders: it helps them build their vision of the future. Amazon is the largest online retailer in the world, therefore the company is well aware of their achievements and their ongoing success.

Threat of New Entry: The threat of new entry is at a minimal since the market is mainly dominated by OSIM, OGAWA and OTO. For a new brand to enter this market they will have to have significant capital, the tenacity to face reputable brand that have a foot holding in Singapore and technologies that surpasses OSIM.

The barriers for this industry are high. When looking at the five forces the first to consider is the thread of substitutes. Other modes of transportation could pose a threat but would be dependent on your perspective competitive advantage point. Rail and bus are threats for land travel and boat and ship pose a threat for marine travel. As far as bargaining power of buyers, this industry faces strong buyers powers due to the presence of existing buyers as well as advancements and innovation in technology. The barriers to enter the industry grant high bargaining power to the suppliers and some aircraft are only available by a few suppliers. The competitive rivalry is high because of the different competitive strategies that are employed for market share increases. The growth rate within the incrase is low and fixed cost within the industry are very

This worksheet was developed to apply Porter’s Five Forces analysis to an industry. For each of the factors listed below, place an “X” in the appropriate column (Yes, No or Moderate). Once you have completed the analysis of the five forces, compute the number of factors for each category, and write down the number for the overall analysis.

Porter 's Five Forces Framework is a tool for analyzing competition of a business of an industry in terms of its profitability. The most unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit levels. The five-forces perspective is associated with its originator, Michael E. Porter of Harvard University. This framework was first published in Harvard Business Review in 1979.