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Education - PORTERS FIVE FORCES
Education - PORTERS FIVE FORCES
INTRODUCTION
The five forces analysis is a method of identifying the forces which influence and
The porter model states that the structure of any industry and the capability of any
firm in that industry to operate strategically depend on the comparative strength of the
five forces that determine the state of competition and therefore the profit potential
theoretical framework for industry analysis. He developed the five forces model for
This threat is a very significant force and it varies with extent of its entry and exit
barriers. Organizations are attracted by high level of earnings whereby they seek
every opportunity to enter any market that could be a potential for success and high
earnings. New entrants introduce to the industry new ideas, strategies, technologies,
capacities, and sources. The extent of competitive threat to an industry from new
entrants depends upon the presence of obstacles and barriers for entry. The major
aspects of threat of new entrants include several factors that have a general impact on
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The capital cost of entry: If establishing a corporation needs huge amounts of
will result to a difficult and high competitive trading environment which will
level day-by-day, it has become difficult for the investors to reach those
standards in terms of higher education industry. The investors have to read the
high standards of the people first and then try to introduce and make the higher
standards of education.
Access to supply distribution channels: When there are experienced firms like
Muscat College and Majan College which have access to distribution channels it
makes hard for new sectors to have access to these channels of distribution and
education industry. This factor is good for long existing sectors unlike new
industries in the educational field, which would take them more time to achieve
economies of scale.
Brand loyalty varies in the amount of power and value existed in the education
Existing firms that provide different levels of education formed high entry
barriers by gaining brand loyal students who find it so difficult to switch to other
products. The value of certification issued by the famous institutes like Majan
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The confrontation of existing firms: Generally existing firms will face new
entrants with a hostile behavior by reacting strongly in order to make the entry
very costly and unfavorable. For instance, the can under cut prices that will
Experience curve: Early entrants into the educational sector gain experience
sooner than others. This can give the advantage in terms of capital cost of entry,
markets.
In most industries the all organization are in a heavy competition with each other in
order to gain the reputation and pride. This high competition can become even more
unattractive when other factors come in such as high fixed costs and high exit
barriers. This will lead to frequent course fees clashes, advertising battles and
sectors to compete. The direction that a firm chooses depends on the relative
strengths and weaknesses of the factors involved. For example, it is often the threat
of substitutes that leads to the formation of strategic alliances. Rivals are often the
competitors who try to be the best in the industry. Rivals and competitions often lead
to good business and education in the related industry, but sometimes competitions
may lead to heavy loss and the colleges and universities may collapse. Some of the
universities and colleges in Oman try to offer lower fee structure to attract the
students some have high fee structure with advanced courses and higher level of
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certification that match standards of the modern age. All the higher educational
whereby they can raise prices or reduce quantity supplied. Suppliers can be powerful
when there are few substitutes and when the supplied product is an important input
with the fact that the costs of switching suppliers are high. Oman is following the
western educational systems that are the main suppliers of educational system. The
suppliers should be handled with care because the studying material and the
certification materials that the education industries get for their daily and yearly
operation relies on the suppliers that are presently The UK. So if the relation between
the suppliers is not good then there could be problem for the operation of the higher
When buyers posses a strong bargaining power they will try to force prices down,
demand more quality and services. The buyers bargaining power grows stronger when
products are undifferentiated with many substitutes in the industry. The quantity of
suppliers within the Sultanate of Oman is very low or there are no suppliers who
provide the educational materials for the universities and colleges in and the number
of users of their services i.e. the higher educational institutions are more, so the higher
education industry faces quite a lot of problems in switching between the suppliers
because of their higher costs. So there is a great demand for the suppliers and this
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helps the suppliers to stick on to their prices and give less encouragement to the
The availability of substitutes in the industry would place a limit on prices and on the
the industry prices and profits are more likely to fall. Therefore, educational sectors
have to monitor closely the price trends in the substitutes. The educational
institutions within the Sultanate of Oman need to find the local substitute who could
offer better services at cheaper rates and of course with the quality that matches the
RECOMMENDATIONS
The Sultanate of Oman is constantly striving for the benefits of higher educational
conditions.
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Try developing the local system of education within the country so that the
To have highly qualified staff so that the level of education given should be
To have the educational camps within the city and interior areas to spread the
importance of education and the important services and courses offered by the
college and university and the benefits of these courses in their life.
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BIBLIOGRAPHY:
Publications, London.