Porter’s 5 Forces for Car2go Project in Osaka, Japan

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Table of Contents

Introduction
Main Discussion
Summary
Works Cited

Introduction

The use of Porter’s five forces in analyzing the business plans is something that is today almost synonymous to the process of strategic marketing planning. These five forces, advanced by the renowned macroeconomist and Harvard scholar; Michael E. Porter in 1979, essentially help in guiding business planners on what to expect in their new business ventures and how they should handle their challenges as well as opportunities.

These forces are: Threat of New Entrants, Bargaining Power of Suppliers, Bargaining Power of Buyers, Rivalry among Existing Competitors, and Threat of Substitute Products or Services as summarised in the diagram below.

Porter’s five forces

A circumspective analysis of these forces, in relations to the proposed Car2go project in Osaka, Japan, is succinctly done below.

Main Discussion

Threat of New Entrants

In essence, the arena of transportation (both public and private) is flooded with constant entry of new entrants based on the ever increasing need for people to move from one place to another. As a result, there is always a ready market for new entrants. Osaka, Japan being a reportedly business hubbub, entry of new competitors is bound to happen and we therefore have to be ready and prepared to deal with that.

To deal with the above challenge, Car2go plans to widen the scope of its businesses such that the entry of new competitors will not have much effect to their business endeavors. Pilot programs of these new diversifications are already underway in the current branch in terms of their products and services. By the time we move into Osaka, Japan, the company will have already known the relevant and fitting plans to put in place while also being aware of the ones to be ignored.

Bargaining Power of Suppliers

In assessing the aspect of dealing with the bargaining power of suppliers, we have to chiefly consider the elements of cost and time to be utilized in the project. Given the fact that Car2go already has working system of suppliers that get to internationally supply the company in countries and regions like U.S.A, U.K, Canada, Germany, France, Austria and Netherlands; the company intends to use the same suppliers for purposes of cost and time efficacy.

However, there are instances that there may be complications like delays by the suppliers or even jurisdictional restriction by traffic laws thus limiting some transportations (Watanabe 4-7). In times like these, new suppliers will be required so that the company is able to duly serve its new customers at Osaka, Japan. To this regard, Car2go will therefore have to increase the number of suppliers so as not to be affected by any market fluctuations.

Bargaining Power of Buyers

Studies by our market researchers indicate that a good number of public and private transportation and car rental companies exist in Osaka, Japan. With the rise in the number of outlets offering products and services similar to Car2go, customers will have a wide range of options to choose from. In effect, this will result into a price war ultimately favouring customers.

In other words, the customers will have a high bargaining power thus making cost-plans for quite challenging for service providers. In regard to our case, Car2go is renowned for having good prices for its buyers. This good price system will be replicated in the Osaka, Japan so no difficulty is expected.

Rivalry among Existing Competitors

As glimpsed in the previous section, Osaka, Japan already has a significant number of companies offering products and similar to ours. Rivalry from these existing competitors is bound to fierce and expectedly tough. However, scholarly and market reports from various quarters indicate that Car2go is reputed for having good relations with other market players so very minimal challenges are expected.

Even more importantly, the existing players only act as a motivation for Car2go to work extra hard—something which is bound to ensure that continuous progress ensues. Our good brand name in car rentals services as well as in both public and private transportation will also be a plus for Car2go in edging off the competition from the existing competitors.

Threat of Substitute Products or Services

In today’s fast growing and highly competitive market of transportation, there is need for organizations to adopt an effective strategy for marketing in order to gain revenues and gain competitive advantage as well as meet its operational goals (Czinkota & Ronkainen 186-190). This is driven by the presence of competition among companies for the already relatively-full market.

A company that has inferior products and services rarely attains success, or survives in such a market (Porter 201-205). This occurs since those companies that have effective marketing strategies win a large pool of customers in comparison to those companies that have weak marketing strategies.

Over time, success in Car2go is usually measured in terms of gains (market share, revenues), and meeting operational goals. So, in order to fulfil these vital aspects of success, we intend to implement a diversification plan which entails venturing into other regions while bettering its product and services. In effect, the threat of substitute products or services will be thwarted while the company’s targets are met thus ensuring that we achieve overall success.

Summary

Just like most business ventures, our project plans, in regard to Porter’s 5 Forces, may result in success or failure. It is for this reason that this plan calls for everyone involved to ardently play his/her part. It is only by doing this that we can have some assurance that our plans will be foolproof of the usual market hiccups and the never-ending economic challenges.

Additionally, as seen in many other companies who have followed the formula we are proposing to institute the new branch in Osaka, Japan; we expect some copycat competition from our numerous competitors after we launch our branch. So in order to stay a step ahead of such competitors, we are planning to periodically revolutionize our operations after commencement in Osaka, Japan. Revolutionizing and bettering the myriad of facets entailed in Porter’s 5 forces will definitely offer Car2go competitive advantage over other market players.

Finally, it is worth noting that the Japanese market, to be specific, and the Asian market, in general, is highly dynamic and sophisticated. In order to survive in it, we not only intend to use strategies that have previously worked in our other branches but we also intend to customize and adapt our transportation products and services to the existing market intricacies. This way, our success will be highly guaranteed.

Works Cited

Czinkota, Michael R., & Ronkainen, Ilkka A. International Market. 8^th Ed. 2007. London: Cengage Learning, Print.

Porter, Michael E. Competitive Advantage: Creating and Sustaining Superior Performance: with a New Introduction. New York: Free Press, 1998. Print.

Watanabe, Ryo. Overview of the Public Transport System and Policy in Japan. 2-3 Mar. 2005. Web. <https://www.itf-oecd.org/>.

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