Porter's 5 Forces Essay Example | Topics and Well Written Essays - 500 words

Porter's 5 Forces - Essay Example The robotics industry is experiencing growth year after year and the industrial robot application has become more demanding and complicated due to modernization and automation of the manufacturing processes. I will analyze each of the forces and the impact that may be experienced in regards to profitability of the robotics industry. Existing Competitors: Within an industry, the rivalry among the competitors is countered through use new products, marketing and price discounting to be competitive. The robotic industry tends to be an oligopoly since it has a lot of rivals. The potential for product differentiation is high with much difference in power, size, quality, service and features of the products. The Power of Buyers: Consumers can capture more value by ensuring that they force the prices down and demand better quality at the industry’s profitability expenses. The top buyer from the robotic industry is the automobile industry. Literally, the number of auto firms is small but they buy in large quantities. In contrast to the automotive buyers, other buyers in other industries are moderate in power. They are smaller, many and buy in smaller volumes The Power of Suppliers: Suppliers have great influence in an industry by changing higher prices, limiting the quality of services and shifting costs. The products provided do not usually have substitution, but some tend to come up with techniques to realize differentiation of the products. The overall power of suppliers in the robotic industry tends to be weak. Threat to Entry: New entrants into the market pose a threat to the profit potential of an industry. According to Porter, the threat of entry in an industry is dependent on the height of entry barriers. In addition, it is dependent on the reaction of the incumbents expected by the newcomers. When there are few entry barriers and little or no retaliation from the competing