P. 1
Porters Five Forces

Porters Five Forces

|Views: 306|Likes:
Published by Qurat.ul.ain Mumtaz

More info:

Published by: Qurat.ul.ain Mumtaz on May 23, 2011
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less






Porter has identified five competitive forces that shape every industry and every market. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry

Bargaining power of Supplier:
There is a low bargaining power in the advertising industry of Pakistan because of the following reasons. 1.Increase in the number of content providers , As there are a number of advertising agencies present in the market and providing the same service to the customers in order to increase their clientele so the suppliers cannot raise their prices according to their own will. 2. The switching cost from one supplier to another supplier is not very high.

Bargaining power to the Customers:
There is a high bargaining power of customers in the advertising industry of Pakistan because of the following reasons: 1. Availability of the variety of alternative sources for the advertising and promotion purpose of their organizations and brands. 2. Switching to an alternative product is relatively simple and is not related to high costs 3. The customer knows about the production costs of the product

Threat of New Entrants

4. Loyalty of the customers with their existing service providers. it is a group of company having many extensions so it has a strong financial state. Strength: • • • Interflow Communications is not only an advertising agency. we can conclude the following strengths and weaknesses of Interflow Communications Private Limited.Midas 5. 2.Pak Ad Com 4. SWOT ANALYSIS Based on the above analysis of porter’s diamond model.LNR 3.ONM 7. Low market growth rate. Threats of Substitute: The threat of substitute is high in the Pakistan’s Advertising industry as there are a number of competitors present in the industry having a goodwill and expertise.Synergy Industry Competition: There is a high competition in the Pakistan’s Advertising industry because of the following reasons: 1. Requirement of high and risky investment. Highly perishable products. Interflow Communications has an International affiliation with the renowned advertising organization OLM.There is a low threat of new entrants in the Pakistan’s Advertising industry because of following reasons: 1. Interflow Communications is among the top five advertising agencies of Pakistan having almost 33% of market share. Expertise and creativity requirements.Orient Mccan 6. Highly fragmented Industry. Less number of customers available in the market because of the financial and economical crisis in Pakistan. 3. The names of the major market leaders besides Interflow Communications of Advertising Industry of Pakistan are as follows: 1. . 2. 3.JWT Asiatic 2.

Global exposure with higher rewards & appreciation.33 Telecommunication company Ltd China Mobile 6. Rank(FY-2009-2010) 1 Pakistan 2 3 Telenor Pakistan Pvt Ltd 4 Procter & Gamble Pakistan 5 Pakistan Mobile 6 7 Engro Food(Pvt)Ltd 8 9 10 Colgate Palmolive Pakistan Ltd Pepsi Cola International 2.52 2.70 4.13 6. China Mobile.11 5. According to the Gallop survey of Pakistan.• • • • • • • • • • • Inter flow Communications has well trained and highly morale staff.48 2. product and service diversification and a sustainable business model. Among these advertisers PTCL and its subsidiary Ufone are the clients of Interflow Communication and enhance its market share efficiently. Company has Quality in advertisement. UNILEVER maintains its TOP position.36 Company UniLever Pakistan Ltd. Inter flow has diversified market position. Products as well as services advertising are done here simultaneously. followed by PTCL.17 Weakness . Company is meeting up the client requirements in time. the TOP 10 Companies advertised on TV made up more than 56% of total advertising share in 2010. Inter flow have a vast sales channels. Innovative & creative in advertisement segment. Telenor and P&G. Efficient team working environment. %share 15.44 7.85 Communications(PVT)Ltd Nestle Pakistan Ltd 3.

. Total Advertising Spend in Pakistan is estimated at 30 Billion Rupees. if these clients are lost then Interflow will suffer from a heavy loss and will lose its market position. These clients constitute 80% of their sales (20-80 principle). Interestingly Print Ad Spend increased the least (4% only). After the death of the owner of Orient Advertising Agency S. Ten Year Reflective Study on TV Advertising 9 Skin Care Rank(2009) 1 2 3 4 5 6 7 8 9 10 Top Ten Sector of Advertising Telecomunication Foods Drinks House Hold Cleaning Materials Hair Care Soaps Confectionary Real state Skin Care Hoese Holds/office goods Rank(2001) 16 1 2 8 6 9 3 19 12 5 Threats . Social Marketing Sector is developing attracting funds in the country. The largest increase was seen in TV (17%). Telecommunication Sector and food sector have increased its budget for TV advertising with a considerable amount in last few years. Entering in global market to attract global client Advertising business is now converted into an industry. which can be grasp by efficient service. increases by 12% over the previous year. Interflow communications now a day’s having vertical growth having no diversified portfolio with only key accounts.• • • • Interflow Communications has small number of Leading Advertisers in Pakistan. it loses its goodwill and number of clients. Opportunities • • • • • • • • Because of the economic crisis in Pakistan. Profit margin is big challenge now days. the companies are focusing more on the advertising and promotions of their brands in order to enhance brand recall and recognition which ultimately increase their sales. Expert employees are quite costly. New complimentary markets are there for business projection. Lack of new product and services entry.H Hashmi and division of this agency.

• • • • • • • • The economic downturn faced by the country in last 2-3 years results in the worst economical and financial condition. New competitors are in market as there are almost 40-45 new advertising agencies which are also in competition. The presence of OLM as a separate advertising agency and a competitor of Interflow Communications. The high growth rate of Midas and M Com. Client’s economical position also effects . Dissolution of HEC and Ministries in Islamabad which constitute a major portion of the sales of Advertising Agencies.In the present situation advertising expenditure is only increasing due to spend of few big clients. . Changes in the taste & preferences of clients. Challenging stiff competition from its competitor’s from both domestic & international levels.

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->