PORTER’S FIVE FORCES

MODEL
OF
MDRA

Submitted by: Varun Kumar Submitted to: Prof. Jan Surya

Enrollment NO- 19BSP3167
Section-D

PORTER’S FIVE FORCES MODEL

1. Intensity of rivalry among competitors – The intensity is high in the following cases
 When the number of players is few (oligopoly)
 When the market growth is slow
 In case the exit barriers are tough
 Customers have low switching cost

In case of MDRA, the competition is intense from Global as well as from domestic competitors
as all the factors mentioned above hold true except the one of market growth. A little scope is
that the market growth is at a good rate which reduces the intensity to a certain extent.

2. Threat of new entrants – Entry of new competitor in the market weakens the power of the
existing firm. The threat of new entry is high in the following cases
 The capital required to start the business is low
 The key technology is not difficult to acquire
 The product is not differentiated
 The switching cost is low
 The market is expected to rise rapidly

In case of MDRA, the threat to new entry is neither very high nor very low. Big houses business
houses are entering into the market. Since there is no barrier to entry, MDRA does face a niche
part of threat. The threat arises on the basis of profit margins which further depend on the
accuracy of solution provided or the effectiveness of field team.

3. Threat of substitute products/service – The threat is high in the following cases

• When substitute products or service are available
• Customers can easily find the product or service at same or lower price
• The quality of substitute is almost similar to the quality of existing product

In case of MDRA, even though there are many projects successfully completed through
well planned research. The company till date does not have high threat of substitutes because
they provide services and database at effective prices.

4. Bargaining power of customers - It means the extent of control which a customer has to
drive down the prices of the end product. The bargaining power of the buyer is high in the
following situations
• When there are few buyers chasing to too many products
• When the product is purchased in bulk
• The product is not differentiated
• When the switching cost of the customer is low
• When the buyers are price sensitive
• When customer integration happens
 In case of MDRA, since the company has a competitive pricing of its services with less
substitutes, it has a higher edge over the buyers. It has loyal clients and price sensitive customers
who are willing to get the services.

5. Bargaining power of suppliers-It means how strong the position of a company is in

Negotiating with the supplier of raw materials. The power of supplier is high when

• When the number of buyers if few or they are concentrated and well organized
• If the company is not an important customer
• There are few or no substitutes available of the supplied raw material • If the switching cost of
one supplier to another is high.