Porter’s Five Forces Model. Strategic Management

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Table of Contents

Competitive Rivalry
Threat of Substitution
Threat of New Entry
Reference

Fiver Forces Model applied to two segments	Competitive Rivalry	Supplier Power	Buyer Power	Threat of Substitution	Threat of New Entry
AC Cameras	High	Low	High	Medium	High
UAV Drones	High	Low	High	Low	High

Competitive Rivalry

The AC Camera segment has a considerable level of rivalry since the market is shared almost evenly by seven brands. The number of sales by each company also demonstrates that there is no one particular leader.

Competitive rivalry in the UAV Drone segment is intense, especially among three companies, A, F, and G. The majority of the brands are sold at more than fifty retailers, which means that there is a strong effort to attract customers.

Supplier Power

Suppliers do not possess any substantial bargaining power in both segments since the most technologically advanced processes are performed at the companies’ factories. Suppliers provide brands with the parts necessary for the assembly of the cameras and drones.

Buyer Power

The bargaining power of buyers is strong in both segments because customers can choose from a large variety of products. Moreover, clients do not face any switching costs when changing their AC cameras or UAV drones which grants them additional bargaining power (Schilling & Shankar, 2019). Additionally, people who buy ac cameras and drones usually belong to small communities of sportspeople or photographers, which makes each of them highly valuable for the manufacturers.

Threat of Substitution

The threat of substitution for action cameras is moderate since, despite the fact that ac cameras can be replaced by digital cameras, the latter do not have the same features such as stabilization and small size.

UAV drones are unique, and the only substitutes for the technology are planes and helicopters, which are costly, large, and inconvenient for recording video.

Threat of New Entry

There are no significant barriers to entry in both segments since technologies behind ac cameras and UAV drones are available to the public. Any enterprise can start manufacturing these products if it has facilities and finds proper suppliers.

Reference

Schilling, M.A., & Shankar, R. (2019). Strategic management of technological innovation (6^th ed.). McGraw-Hill Education.

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Porter’s Five Forces Model. Strategic Management

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