Porter's five forces analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. The framework includes an analysis of five concurrent forces that affect a business' ability to compete. The forces include:
1. Threats of substitute products from competitors, including product differentiation, price performance of substitutes and a buyer's ability to switch to a substitute. This force is especially threatening when buyers can easily find substitute products with attractive prices or better quality and when buyers can switch from one product or service to another with little cost.
2. Threat of the entry of new competitors, such as barriers to entry (i.e. …show more content…
Even a few years back the industry was not as robust as it is now. Initially, Citycell enjoyed total monopoly in this sector. After the entry of Grameenphone and Aktel, the industry condition changed. Citycell lost its place as a monopoly player as Grameenphone took over most of the market share and Aktel took the second position.
The scenario further changed with the entry of Orascom Telecom, the mobile giant from the Middle East. They entered the market by acquiring 100% shares of Sheba Telecom and re-launching the brand as Banglalink. Aggressive marketing and promotion were one of their main entry strategies and it worked. The airtime rates and connection prices came down because of the competition. This was an awakening call for the other operators. Grameenphone and Aktel, who were quietly enjoying their market positions, suddenly became aggressive as well. There was a huge increase in promotional activities of all mobile operators. The prices also started climbing …show more content…
Since the number of mobile phone companies are limited the suppliers cannot switch frequently or pressurize the buyers. On the other hand suppliers like Ericsson, Nokia, Siemens and Motorola are pretty big player themselves and have specialized sales units. Thus, there was always a good understanding between the suppliers and buyers. This situation is now tipped a little bit in the favor of the mobile phone companies by the entry of the Chinese company Huawei. They are offering to supply at lower rates than the previous suppliers. As a result, companies now have the option to go for cheaper