Infolinks1

Monday 18 June 2012

Porter's Five Forces Model of Global Home Appliance Industry


Home appliance industry is mainly consisting of the following players Whirlpool, Maytag, Electrolux Haier, General Electric (GE) and Bosch-Siemens. All these players produce wide range of quality products. Vikings and Sub-Zero are niche players, each producing one exclusive premium quality product line.

Porter's five forces model is a tool to analysis the industry framework. Two forces in this model refer internal threats and other three forces refer to external sources of competition. These forces determine the competitiveness of the overall industry which represents the attractiveness of the industry. Here is the example of US home appliance industry.

Threat of new entrants

Threat of new entrants is very low because heavy investment and sophisticated R&D is required in appliance market and industry is matured with intense competition, profitability is not lucrative for the new entrants. Brand loyalty also plays an important role and big distribution network is required. Due to the intense competition existing players will retaliate the new entrance. There are many threats for new entrance to enter the home appliance industry.  

Exit barriers

Because of the heavy investments in specialized fixed assets and sophisticated machinery, it is not easy for any existing player to quit the industry. Each product require the special technology and investment, it is not easy to leave the entire setup.

Power of buyers

Power of buyers is very high, not only final consumers drives the quality and innovation, also the middle-men and builders can and do exercise pressure on the supplying firms to provide energy efficient, environmentally safe and high quality products in low cost. Buyers want to place only high quality and well known brands in their stores.

Power of suppliers

Power of suppliers is low, appliance companies dictate the terms. They are forcing the suppliers quality products and to follow JIT concepts. Manufacturers have the exclusive contracts and alliance with suppliers.

Threat of substitute products

Threat of substitute products is very low, there are not much substitutes available. Even if they are (e.g. Laundromats, fan industry) they are not powerful.

According to the Porter's five forces analysis, US home appliance industry is moderately favorable or attractive. New player can enter the market and enjoy profits.   

15 comments:

  1. wow this appliance is very good.no gas no burning its really good safe healthy and energy saver and also non stick.Thank you so much.


    Remote control switch for home appliances

    Remote switch for light

    Remote switch for lights fan

    ReplyDelete
  2. Your blog is nice Thank for sharing the information about the home appliances. Buy wholesale online shopping India.
    home appliances shopping online india

    ReplyDelete
  3. I was surfing net and fortunately came across this site and found very interesting stuff here. Its really fun to read. I enjoyed a lot. Thanks for sharing this wonderful information.

    ReplyDelete
  4. This is a good post. This post gives truly quality information. I’m definitely going to look into it. Really very useful tips are provided here. Thank you so much. Keep up the good works. Walking Tour of Roman Squares

    ReplyDelete
  5. Hey Nice Blog!! Thanks For Sharing!!!Wonderful blog & good post.Its really helpful for me, waiting for a more new post. Keep Blogging!
    Tumble dryer repair in Dubai

    ReplyDelete
  6. Your appliance repair expert should understand those differences, too. When you're researching appliance repair companies online, Troubleshooting Your Ice-O-Matic Commercial Ice Maker

    ReplyDelete
  7. Decorating bedroom with something unique is everyone’s wish. But we often get stuck in making choice and decision. Perhaps Poundex F9389Q bedroom set can be a solution. Its unique and eye catchy.

    ReplyDelete
  8. It’s actually a great and useful piece of info. I’m happy that you just shared this useful info with us. Please stay us informed like this. Thank you for sharing.
    Datzitt

    ReplyDelete
  9. Someone Sometimes with visits your blog regularly and recommended it in my experience to read as well. The way of writing is excellent and also the content is top-notch. Thanks for that insight you provide the readers! SubZero, Viking Ice Maker Repair SAN BERNANDINO

    ReplyDelete
  10. This is only the data I am discovering all over the place. A debt of gratitude is in order for your website, I simply subscribe your online journal. This is a decent blog.. Factory Authorized American Range Repair

    ReplyDelete
  11. The steam mop tends to be better at sanitizing a floor and a spin mop tends to be better at getting out tougher dirt from a floor.
    This blog compares the steam mop vs. the spin mop to help you decide which one is best for your floors. So let us discuss this in detail.

    ReplyDelete
  12. Thank you again for all the knowledge you distribute, Good post. I was very interested in the article, it's quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one. Appliance People Voucher Code

    ReplyDelete
  13. Thanks for sharing your Blog. Realy it is Very informative. If you want to buy Washing Machine and Air Purifier so you visit our one of the reputed website Kridovia online store located in the India. Our products are available at very best prices. Contact us for more detail.

    Best Kitchen Appliances
    Dual Zone Wine Cooler
    Best Dehumidifier

    ReplyDelete
  14. Truly you have shared very useful information. Eager to learn new information
    Thanks for sharing
    electromenager tunisie

    ReplyDelete
  15. Hey Nice Blog!! Thanks For Sharing!!!Wonderful blog & good post.Its really helpful for me, waiting for a more new post. Keep Blogging!
    household appliance repair surrey
    appliance repair in delta

    ReplyDelete