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Rivalry among competitors in the real estate industry is strong as Megaworld Corporation's main rivals are similar in size, marketing capabilities, and project development. Buyer bargaining power is weak as Megaworld is well-known and offers ready-to-move-in homes, increasing demand. Supplier bargaining power is also weak since Megaworld has many engaged contractors and suppliers seek to maintain partnerships with the large developer. Potential for new entrants is weak due to the industry being crowded with large, established companies and the high costs of operations. The threat of substitutes is moderate as consumers may choose to build their own homes instead of purchasing developed properties, though the switching costs are also high.

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188 views1 page

06 Activity 1panlaqui

Rivalry among competitors in the real estate industry is strong as Megaworld Corporation's main rivals are similar in size, marketing capabilities, and project development. Buyer bargaining power is weak as Megaworld is well-known and offers ready-to-move-in homes, increasing demand. Supplier bargaining power is also weak since Megaworld has many engaged contractors and suppliers seek to maintain partnerships with the large developer. Potential for new entrants is weak due to the industry being crowded with large, established companies and the high costs of operations. The threat of substitutes is moderate as consumers may choose to build their own homes instead of purchasing developed properties, though the switching costs are also high.

Uploaded by

Emirish P
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Rivalry among competing sellers is strong.

(Strong Force)
Megaworld Corporation's rivals in the industry to which it belongs are almost the same size
and have nearly the same capabilities in terms of marketing and expanding their operations.
Furthermore, they build and develop projects comparable to those built by other businesses
like Ayala Land and Lancaster New City, making them formidable rivals.

Buyer bargaining power is weak. (Weak Force)


Megaworld is a well-known national real estate developer. Because the firm offers ready-to-
move-in or rent-to-own houses, apartments, and condominiums. As a consequence, buyer
demand grows, establishing a "seller's market," and purchasers use their services, boosting
demand. Furthermore, the switching cost to competing enterprises and their services is
significant. Furthermore, there is a risk to the investment, and customers are obligated to
make payments to the developer, making it hard to reverse the customer's previous
investment. Finally, because Megaworld is a well-known real estate developer, the buyer
places a premium on the brand's reputation. It is critical to maintain a positive image and
provide quality services to its customers.

Supplier bargaining power is weak(Weak Force)


Due to low switching costs, it has poor supplier negotiating power since developers have lists
of engaged contractors as well as design and construction firms that provide outstanding
services. It indicates that a developer views its suppliers as partners, which is critical since it
establishes a solid relationship with the suppliers that can be maintained to become a long-
term partnership. According to this theory, suppliers cannot demand a change in their prices
since an increase in costs has the potential to harm both parties' relationships. The developer
has power over the commercial relationship since it is a large customer of construction and
architectural companies and contractors; what it wants is a priority to the suppliers.

The threat of Potential new entrants is weak. (Weak Force)


The real-estate development business is already crowded with well-known and renowned
enterprises, making new entries less probable since they would be overshadowed by the
giants. Entering this business is also no laughing matter, as it necessitates a large amount of
cash due to its high operational expenses and resources. This type of company is often only
open to tycoons and millionaires.

Threats of substitute product or service are moderate. (Strong Force)


The needs or preferences of consumers based on their decisions to buy or rent are depicted as
strong competitive pressure from substitute products, owing to consumers' use of substitutes,
which are residential houses owned by consumers established without the assistance of any
developers. Consumers who have already turned to viable replacements according to their
demands or preferences represent a challenge to the real-estate behemoth. This move
illustrates the possibility that customers would avoid ready-to-own or for-rent residences in
favor of establishing a residential house that is acceptable for them. (Weak Force)Meanwhile,
the high switching cost to substitutes for end-users demonstrates weak competitive pressure
from substitute products; the specific reason for this circumstance is that purchasing or
renting a house, apartment, or condominium is less time-consuming and cost-effective than
building a house from scratch. Aside from that, ambitious entrepreneurs gain more from
renting stalls or businesses inside a well-known shopping center because this is where most
people love to shop.

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