The competitive environment faced by Next Directory
In ordor to obtain obtain sustainable development, Enterprises must establish and implement its own competitive strategy. Appropriate implementation of competitive strategy requires coporates to accurately overview its surronunding environment, and carefully analysess its competitive advantages by using Porter’s Five Forces. Different enterprises posess different attributes, however, an enterprise’s fundemental competitive advantages could be included as lower cost an unique stlye which are often from the entity’s product structure, these fundemental competitive attributes allow the entity to survive in crutial rivalry. Obviousely, the cost advantage and the enterprise unique style basicallly come from the entity’s structure, and these two factors are determined by one which has the better capability of dealing with the Five Forces than any other rivals in the market. With no exceptional, NEXT DIRECTORY, the high-performing,flagship operation within the powerful potfolio of business making up Next plc, with over 2 million active customers, one of the largest home shopping & online business in the UK, is also facing the challenge of the Five competitive forces in the market.
1. The Threat of new entrants: It is not only the incumbent rivals that pose a a threat to firms in an industry, the possibility that new firms may enter the industry also affects competition. In theory, any firms should be able to enter and exit a ma英语论文网 【http://www.51lunwen.org】rket freely. In reality, however, industries possess characteristic that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market . In our case, barriers for entering the field of online business is extremely high. The industry is consisted of several big firms in the UK, such as Next Directory, Marks&Spencer, Acadia. These big firms which have already extended into the market possess strengh in terms of occupation of market share, products developing, advertising, retailling srategy. Whats more, firm’s unique characteristic and loyalty of consumers would also be a great barrier to those potential entrants。
2. Threat of the substitutes: In Porter’s model,substitutes product refer to product in other industries. To the economist,a threat of substitutes exit when a product’s demand is affected by the price change of a substitute product. A peoduct’s price elasticity is affected by substitute product-as more substitutes become available, the demand becomes more elastic since customers have more alternatives. A close substitute product constrains the ability of firms in an industry to raise prices.(1999-2007 QuickMBA.com,This web site is operted by the Internet Centerfor Management and Business Administration, Inc.) Apparently, the substitutes for online shops are the street retailers. As we known that with the rapid development of internet in the past decade, the usage of internet has involved in many field, especially in th
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