The 5 Force Analysis of GOODSERVE BUSINESS SOLUTIONS

GROUP MEMBERS
‡ ‡ ‡ ‡ ‡ Name Roll No. Abhishek Patil 085 Abhishek Verma 105 Ravi Prakash Singh 090 Santosh Nair 084 Vikrant Gole 075

Type of Industry Our Industry Shipping & Logistics .

‡ Reverse selling as a mode of entry in a more competitive market. we would like ourselves to expand to Europe & US sectors. ‡ This will be done by focusing on existing clients who has business to these sectors. ‡ Expanding our overseas agent base.Our Competitive Strategy ‡ With a relatively established Middle east and Southeast market. .

Bargaining Power of Buyers Determinants Question Concentration Are the buyers fragmented or highly concentrated (i. buyer bargaining power is typically high. their bargaining power is typically high. Are switching costs low or high? If buyers face few switching costs. buyers typically have high bargaining power.Product can vary from raw materials to finished products -Due to very low switching cost and many no. . then buyer bargaining power is typically high. do a few monopolize the market)? If they are few and concentrated. . Is the buyer¶s product or service a commodity? Is branding critical for success? Is there an actual versus a perceived difference? If the products are standard or undifferentiated. Power of Buyers 2 Reason -Many buyers(clients) exists..Logistics cost is 10-15 % of total invoice value.e. of providers Product Cost versus Total Purchases Product Differentiation 4 3 Switching Cost 3 . Does your product buyer¶s purchase represent a significant fraction of the buyer¶s costs? If so.

Is the product you offer important to the quality of the buyer¶s products or services? If not. buyer power is typically high. Can they make what you make themselves? Is there a threat of backward integration? If so. -Appropriate documents required. the threat is typically high. they are typically more likely to bargain hard. buyer power is typically high.Bargaining Power of Buyers Determinants Question Profits Backward Integration Impact on Quality/ Performance Do buyers earn low profits? If so. -Transparency in service and costing 1 Buyer Information Does the buyer have complete information on the product he may purchase? If so.High Cost and Coordination -All shipments are transit sensitive. Power of Buyers 4 2 Reason -Due to low profit margin . 4 .

. Example:. TATA MOTORS. ‡ Entry of small players in logistics has invariably increased bargaining power of buyers.Overall Threat Level Of Buyers ‡ Rating :. resulting in proportionate growth of logistic Industry.High Reasons ‡ Low entry barriers in export market has given rise to new and cut through competition.APAR INDUSTRIES. CIPLA.4 ‡ Threat: .

suppliers are typically powerful. Ex: Shipping line & NVOCC 2 Is your supplier¶s product essential to the quality or performance of your business? If so. suppliers are typically powerful.Bargaining Power of Suppliers Determinants Question Concentration Are your suppliers fragmented or highly concentrated (i.. Is your industry an important customer of the supplier group? If not. do a few monopolize the market)? If an industry is dominated by a few companies.e. 3 . Power of Suppliers 2 Reason -Many Substitutes Presence of Substitute Inputs Importance Relative to Customer Impact on Quality/ Performance 2 -Many options available -Suppliers can provide value addition Ex: Ancillary Service -It is required to an extent. the suppliers are typically powerful. Are there any substitutes for your suppliers¶ products? If not. suppliers are typically powerful.

5 . -Less Financial liability. suppliers are typically more powerful. -Numerous number of options available amongst suppliers giving same services.Bargaining Power of Suppliers Determinants Question Power of Suppliers 2 Reason Product differentiation Is the supplier¶s product or service a commodity? Is branding critical for success? Is there an actual versus a perceived difference? Suppliers with differentiated products typically have more bargaining power than suppliers selling commodities. How costly is it for you to switch from the supplier¶s product? If switching costs are high. hence low cost -Very high in case of NVOCC Switching Costs Forward Integration 2 Can the supplier produce the product you make? Is there a threat of forward integration? If so. suppliers are typically powerful.

Mearsk.Low Reasons ‡ Supplier¶s service is available in abundance in most of logistic component which makes it less threatening. .Bombay Ludhiana Road lines (BLR).Overall Threat Level From Suppliers ‡ Rating :. Allcargo . Example:.2 ‡ Threat: .

How frequently is there a problem of excess capacity in your industry? Are there periods when there is excess capacity? Overcapacity often leads to price cutting. Does your business have high fixed costs? If so. -Laborers or employees during recession or at a time of slow growth business can become a liability. there is likely to be a more intense fight among rivals for market share. the fiercer the intensity of rivalry. the closer a product is to being a commodity. there is typically a threat.Threat from Rivals Determinants Question Intensity of Rivalry 3 Reason Industry Growth Fixed Costs How slowly or quickly is the industry growing? If it is a slow growth industry. thus posing a significant threat. -Depends on economic conditions. 4 . -CHA License. -Not all verticals like transportation and custom broking. 4 Intermittent Overcapacity 1 Product Differentiation Is your product or service a commodity? Typically. rivals will typically be tempted to cut prices to ensure sales. If so.

it¶s more difficult to establish the rules of the game. -Not very critical Switching Costs 5 -Very easy. How costly is it for your buyers to switch between providers? Low switching costs typically increase rivalry. so the threat from competitors is greater. Are there competitors with different strategies and frames of reference? When competitors are diverse.Threat from Rivals Determinants Question Intensity of Rivalry 2 Reason Brand Identity Is branding critical for your rival¶s success? Is there an actual versus a perceived difference? Brand identification by buyers reduces the threat of rivals. all chasing after the same customers? If so. rivalry is typically intense. Are there a large number of firms of equal size and power. companies must struggle to capture and retain customers. lot of alternatives Concentration and Balance Diversity of Competitors 5 4 -Low exit and entry barriers -Innovative diversity does not exists . When a customer can freely switch from one product to another.

. -Providing high credit to penetrate the market Exit Barriers 1 -Less Financial liability which enables companies to wind up easily . when an organization has specialized assets that cannot be easily sold off.Threat from Rivals Determinants Question Intensity of Rivalry 4 Reason Corporate Stakes How high are the rivals¶ corporate stakes? What do rivals stand to lose (e. -Stakes are High. for example. The intensity and volatility of the rivalry increases when firms select alternative strategies that may sacrifice short-term profitability.g. Are exit barriers low or high? High exit barriers make it costly to abandon a product. and gain market position. profits. diversify. decision-making power)? Strategic stakes are high when several firms in an industry take great risks to expand.

competition can easily under quote the freight component to get the business. ‡ With considerably low barriers to entry & exist.Overall Threat Level From Rivals ‡ Rating :.High Reasons ‡ Movement of freight is mostly a high cost affair and relatively a fixed cost. .4 ‡ Threat: . Example: UT Worldwide. Hindustan Cargo (a division of Allcargo).

1 Switching Costs Does the buyer have to pay to switch from one supplier¶s product to another? High switching costs are typically a barrier to entry. customer service. Do new entrants need to differentiate by spending heavily on advertising. 1 .Threat from New Entrants Determinants Question Economies of Scale and Experience Product Differences Does successful entry require that companies have significant economies of scale or experience? Barriers to entry are typically high when an aspiring company must cut costs in order to compete in a large-scale and/or experienced market. Threat of Entry 4 Reason -Person should have highly experienced to this industry -No product differentiation because of similarity in products -Branding is not a major factor for business decisions in logistics -Availability of many substitutes 1 Brand Identity Do new companies need to spend heavily on brand identification to gain customer loyalty? Brand identification is typically a barrier to entry. or product differences to overcome existing customer loyalty? Product differentiation is typically a barrier to entry.

Government policies. established companies may have passed a learning or experience curve. Such policies can typically create a barrier to entry. and government subsidies. favorable locations. Such cost advantages are typically a barrier to entry for new entrants. Threat of Entry 1 Reason -Can also start business by putting a sub-agency network -Depends on the type of entry -As the experience and establish survive not only on cost but also on established service 3 5 Government Policy 1 -No stringent government policies . Do newcomers have access to distribution channels for products or services? Difficult access can typically be a high barrier to entry. In addition. can help to preserve or limit competition. Established companies have cost advantages over new rivals because they may have already obtained proprietary product technology. such as antitrust regulations. access to raw materials.Threat from New Entrants Determinants Question Capital Requirements Access to Distribution Cost Advantages Does the new company need to invest large financial resources (relative to market size) in order to compete? Huge capital requirements are typically a barrier to entry.

Established firms may have a history of retaliating. a strong commitment to the industry.Threat from New Entrants Determinants Question Threat of Entry 3 Reason Expected Retaliation New entrants may decide not to enter a new market if existing firms are likely to retaliate. and illiquid assets employed in the industry. But this completely depends on kind of business volumes an established company does. they may retaliate against new players who would threaten sales growth. resources to fight back. Also. if the industry is growing slowly. -Intense competition often results in retaliation. .

4 ‡ Threat: . ‡ Less capital investment. ‡ There is always a chance for a new entrant getting into the market. .High Reasons ‡ Low entry barriers.Overall Threat Level From New Entrants ‡ Rating :.

the threat of substitutes is low. N/A . Improved quality of service can only be the substitute.Threat Of Substitutes Determinants Question Threat Reason from Substitutes N/A -No Substitute for logistic activity. Switching Costs Is it costly for buyers to switch to the substitute product or service? When buyers must pay more to switch to a substitute. -Same as above Price Performance Does the substitute offer a better price or performance? A substitute product or service is a threat to competition when it offers a higher performance at a given price or the same performance at a lower price.

Overall Threat Level Of Substitutes ‡ Rating :. This is the closest substitute where lesser freight & low transit is offered at same time. .N/A Reasons ‡ There can only be a quality substitution and not a product in logistics. then this can be only substituted by someone offering lesser transit by economising freight.N/A ‡ Threat: . ‡ Example: If an exporter want to send a freight by Air to Germany and his existing agent commits 3 days of transit time. One can only try improving the quality.

‡ We always feel that complements offered. ‡ That¶s what signifies when we say ³Where consulting meets service´ .Structure of Complements ‡ GBS has many complements to offer in addition to our main activity that is the ³Freight Forwarding´. is a major leap towards creating value addition and an opportunity to increase economies of scale.

. Documentation & custom benefit consultancy. Cross country shipments.Our Complements ‡ ‡ ‡ ‡ ‡ ‡ Custom Clearance Transportation Warehousing Providing customized ancillary service at warehouse.

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