Big C - Five Forces Analysis

Five Forces Analysis

Five Competitive Forces

Due to the large size of Big C ‘s buyers and there is high price sensitivity among them so, the buyers' power is quite high. As the products of Big C are mass, there is also high level of substitute products providing in the market, the buyers can choose substitute products with low switching cost. In contrast, the suppliers' power is average because of high substitute products and low switching cost. Also, Big C can reach the economies of scale from purchasing large quantity of products which is mass and the company has low threat from capital requirement but there are still high threat of product differentiation and ease of access to distribution channel then, the threat of new entrants is average. Finally, Big C is facing high threat of segment rivalry because the size of the existing competitors is large, high threat of exist barriers and the ways to differentiate the products are few.

Threat of Segment Rivalry

There is high threat of segment rivalry. Although, there are few number of competitors in the same segment, the competitor size is very large comparing with Big C and it is difficult to exit from the industry so, the company faced high threat. Moreover, there are threats from high fixed cost in launching the brand such as cost of long-term assets and the ways to differentiate the product are few.

Threat of New Entrants

For Big C, threat of new entrants is moderate. Although, Big C has low threat from reaching the advantage in economies of scale, cost of switching cost and capital requirement, there is still high threat from low product differentiation and easy to access to distribution channel.

Threat of Substitute Products

Threat of substitute product s is high due to several number of actual and potential substitute of food products existing in the market, high technology in substitute industries which provided conveniences to the buyers such as technology that support payment system and there is also low switching cost when the buyers decide switch to the substitute industries.

Threat of Supplier's Power

As Big C Market is selling food, there are many substitute of suppliers and degree of difference is perceived low so, switching cost from changing buyers is low. However, the quality of suppliers is the most important so, Big C will face high threat when changing the suppliers.

Threat of Buyer's Power