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Porter s five forces of bed bath and beyond

Threat from Substitute Products Rivalry among the existing players. Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. By building economies of scale so that it can lower the fixed cost per unit. Building capacities and spending money on research and development. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.

  1. Although they do not keep long term contracts with the suppliers or vendors, they work with over 5,000 different vendors that can replace any product if they needed to. By building economies of scale so that it can lower the fixed cost per unit.
  2. They buy the products that will help them add more value to their company and provide profit.
  3. By building economies of scale so that it can lower the fixed cost per unit.
  4. Every home can use the versatile porter stool which is an one of my fave purchases from bed bath and beyond what is the porter stool in walnut made out.

Bargaining Power of Suppliers All most all the companies in the Home Furnishing Stores industry buy their raw material from numerous suppliers. Powerful suppliers in Services sector use their negotiating power to extract higher prices from the firms in Home Furnishing Stores field.

Porter s five forces of bed bath and beyond

The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Home Furnishing Stores. By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.

  • This competition does take toll on the overall long term profitability of the organization;
  • Bargaining Power of Customers Bargaining power of customers determines the impact that customers have over the industry;
  • By understanding the core need of the customer rather than what the customer is buying;
  • Powerful suppliers in Services sector use their negotiating power to extract higher prices from the firms in Home Furnishing Stores field.

Developing dedicated suppliers whose business depends upon the firm. Bargaining Power of Buyers Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.

By rapidly innovating new products.

Bed Bath & Beyond Inc. Porter Five Forces Analysis

Threats of Substitute Products or Services When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

By understanding the core need of the customer rather than what the customer is buying.

By increasing the switching cost for the customers. Rivalry among the Existing Competitors If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. This competition does take toll on the overall long term profitability of the organization. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity.