Porter’s Five Forces Framework

MARKETING MANAGEMENT

Marketing Management 1
Porter’s Five Forces Framework
The threat of new entrants
The threat of new entrants is low just because of high capital requirement. It has been
seen that the high capital is required to establish the new business in the cosmetic industry.
The other low degree of threat of new entrants is existing regulatory frameworks. It is
observed that the existing frameworks create many challenges for the new entrants while
entering the market that is why; the cosmetic industry has low threat of new entrants
(Morden, 2016).
Bargaining power of consumer
It has been analysed that the bargaining power of consumer of cosmetic industry is high as
they have limited number of companies. There are limited companies in the cosmetic industry
that offers the similar nature of services to consumers. The companies provide the variety of
products to the consumers with the price strategy in order to attract the consumers towards
the services. As the limited number of companies provide similar nature of product with the
low prices due to which the consumers have many options to buy the product. There are some
companies that offer the various facilities to consumers that is why; the negotiation power of
consumers is high.
Bargaining power of Suppliers
It is observed that bargaining power of suppliers is high as there are large numbers of
market suppliers in the market. As discussed above, there are limited numbers of companies
in the industry who offers the similar nature of cosmetic products to consumers for their
protection. As there is limited number of companies in the industry and the large number of
suppliers in the industry due to which the switching cost is less (Applied Market Research,