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Porter 5 Forces - Final

This document summarizes Porter's five forces model as they relate to the textile industry and Bombay Dyeing specifically. It outlines the five competitive forces as the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing competitors. For each force, it describes the challenges they pose to Bombay Dyeing's profitability and lists strategies the company can use to manage them, such as innovating new products, developing multiple suppliers, and building scale through customer base growth and new product development.

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260 views

Porter 5 Forces - Final

This document summarizes Porter's five forces model as they relate to the textile industry and Bombay Dyeing specifically. It outlines the five competitive forces as the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing competitors. For each force, it describes the challenges they pose to Bombay Dyeing's profitability and lists strategies the company can use to manage them, such as innovating new products, developing multiple suppliers, and building scale through customer base growth and new product development.

Uploaded by

abc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Porter 5 forces:

1) Threat of New Entrants:


New entrants in Textile Industrial brings innovation, new ways of doing things
and put pressure on M/s Bombay dyeing through lower pricing strategy,
reducing prices through newer technology, and providing new value
propositions to the purchasers. M/s Bombay dyeing must manage all
these challenges and build effective barriers to safeguard its competitive
edge.
How to tackle new threats of new entrants:
• By innovating innovative merchandise design and quality.
New products not solely brings new customers to the
fold but also offer existing customer a reason to buy its products.
• Building capacities and spending money on research and development. New
entrants are less probably to enter a dynamic industry wherever the established
players such as M/s Bombay dyeing keep shaping the standards often.
It considerably reduces the window of extraordinary profits for the
new firms so discourage new players in the industry.
2) Bargaining Power of Suppliers
All most all the companies in the Textile Industrial business purchase their raw
material from varied suppliers. Suppliers in dominant position can decrease the
margins M/s Bombay dyeing can earn in the market. Powerful suppliers in
Industrial merchandise sector use their negotiating power to extract
higher prices from the companies in Textile Industrial field. the overall impact of
higher supplier bargaining power is that it lowers the overall profitability of Textile
Industry.

How to tackle Bargaining Power of the Suppliers

• By building efficient supply chain with multiple suppliers , hence remove the
dominancy of any explicit supplier.
• By experimenting with product designs using different materials in order
that if the prices rises of one material then company will shift to another.
• Developing dedicated suppliers whose business depends upon the firm
and therefore creating a scenario where these third
party makers have considerably less bargaining power.\

Bargaining Power of Buyers

Buyers always want to purchase the most effective offerings available by paying the
minimum value as possible. This put pressure on
M/s bombay dyeing profitability within the long run. The smaller and more powerful
the customer base is of M/s Bombay dyeing the higher the bargaining power of the
shoppers and higher their ability to seek increasing discounts and offers.

How to tackle the Bargaining Power of Buyers

● By building a large base of customers. This will be helpful in two ways. It will not only
reduce the bargaining power of the buyers but also it will provide an opportunity to
the firm to streamline its sales and production process.
● By rapidly innovating new products. Customers often seek discounts and offerings
on established products so if M/s Bombay Dyeing keep on coming up with new
products then it can limit the bargaining power of buyers.
● New products will also reduce the defection of existing customers of M/s Bombay
Dyeing to its competitors.

Threats of Substitutes

When a new product or service meets a similar customer needs in different ways,
industry profitability suffers. The threat of a substitute product or service is high if it
offers a value proposition that is uniquely different from present offerings of the
industry.

How to tackle the Threat of Substitutes

● By putting efforts on the inimitable creative design and quality of the product.
● By understanding the core need of the customer rather than what the
customer is buying.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive
down prices and decrease the overall profitability of the industry. M/s Bombay
Dyeing operates in a very competitive Textile Industrial industry. This competition
does take toll on the overall long term profitability of the organization.

How to tackle Intense Rivalry among the Existing Competitors in Textile Industrial
industry

● By building a sustainable differentiation


● By building scale so that it can compete better
● Collaborating with competitors to increase the market size rather than just competing
for small market.

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