Question

the text relative to Porter’s Five Forces of Competition framework. Consider the role of the following key forces of suppliers, substitutes, buyers, and potential entrants.

Select a Middle Eastern company of your choosing and assess the power of each of five forces on that firm:

1. How powerful are the buyers, suppliers, and substitutes? How formidable are the barriers to entryand how intense is the rivalry among existing firms?

b. Which of the forces has the biggest impact on the firm? Why?

Answer 1

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The company i would choose to do Porter's five force analysis is Etisalat which is one of the top telecommunication company in middle east UAE-

The Bargaining power of Buyers for Etisalat in telecommunication industry is medium for Etisalat because there are very few telecommunication service provider in That Gulf region which provide services like calling and internet to customers. There is only big company called DU which makes this power medium because Customers has less options but switching cost for customers is low so they can go to Du anytime if they see that Du is providing better plans or services than Etisalat.

The bargaining power of suppliers for Etisalat has low bargaining power because there are only two big telecommunication services so suppliers have limited market for their supplies so they would have to offer their supplies according to Etisalat 's terms and conditions otherwise Etisalat would look for other suppliers.

the substitute for Etisalat product or services like Landline and internet services are showing low power because there are only two service providers Etisalat and Du which offer landline and mobile telephony services . We know that substitute for internet is not present in the market.so this force is low.

The entry in this market is medium to high for Etisalat because there are only two companies so foreign telecommunication companies like Vodafone, AT&T etc can enter into the market. the government of UAE is putting some restriction this is why this force is medium to high otherwise support of government to foreign telecommunication company would make it very high.

The intensity is very high even there are only few telecommunication firm but Du and Etisalat are making rivalry very intense by offering good services at low prices. Etisalat is putting huge investment on marketing and promotion to gain more market share over DU.

The Force which has biggest impact is Rivalry because if there is no competition in the market then Etisalat will be the sole leader or have the monopoly In UAE but The presence of Du and its market share is affecting the business of Etisalat. This is why This force has greatest impact on Etisalat.