Porter Five Force Framework

Porter Five Force Framework
Porter five forces is a framework that is used to analyse the five competitive forces
that outline all the industries and support in defining the strength as well as weakness of an
industry. This model is mostly utilized to recognize the structure of an industry for defining
the corporate strategy. Porter five force frameworks can be used for the analysis of any of the
economy’s segment in the hunt for attractiveness and profitability (Dobbs, 2014).
Threat of substitute product – Substitute services or products that could be utilized in
place of the product of the company increases the level of threat. Businesses that create
services or products with no close substitute holds higher power to augment the price range
and lock in favourable terms. Considering the case of automobile industry’s accessories
manufacturing market, the ARB Corporation does not deal with much of the substitute threat
which reduces the intensity of this force. Besides this, the switching cost from one product to
another for the customer in the industry is high and there are possibility that customer may
not get the same value from the substitutes they are using.
Competition among existing players – The force of competitive rivalry in the industry
talks about the number of competitors and their capability to weaken a strength or existence
of a company. It has been said that the more the competitors in an industry with offering
equal number of services and products results in lessening the power of a business (Magretta
& Porter, 2012). Buyers and suppliers move towards the competitor if it is offering better
services at lower prices. Considering the industry of ARB Corporation, there are limited
numbers of players who offer similar services and products but are powerful and has higher
share in the market. The limited number of players allows equal chance to other players to
play accordingly and gain the position in the market. Therefore, the competitive rivalry in this

industry is low to survive in the industry there is need of offering higher quality products and
maintaining strong bonds with the suppliers as well as dealers. Some of the competitors of
ARB Corporation in the industry are TJM Products Pty Ltd, Cequent, WARN Industries, etc.
(Zoom Info, 2019).
Power of Buyer – This force of the framework deals with the capability that is hold by
the customer to drive the prices of the services and products down. It is influenced by the
number of customer or buyer a company has, how important every customer is and how
much it cost to a business to search new market segment or customer for its output. In case of
ARB Corporation’s industry, the power of the buyer is low as there is very limited number of
players who provide high quality services that is needed to manufacture the final Motor
vehicle and four wheeler vehicles, hence considered to holding high switching cost for the
buyer (Financial Times, 2019).
Threat of New Players – The power of a business in the industry is also influenced by
the entry of the new player. The less money as well as time it requires by the competitor to
take entry in the market of the company and be an influential player, which impacts the
position of the existing players (Magretta & Porter, 2012). In the case of ARB Corporation’s
industry, deals with lesser threat of the new entrant due to higher entry barriers (Bloomberg,
2019b). This is due to the requirement of high capital investment as well as resources for
operating in the industry.
Power of Supplier - This force talks about how easy it is for the supplier to increase
the input’s cost. It is influenced by the supplier’s number of the service or product. For ARB
Corporation and its industry players the power of supplier is higher due to higher switching
cost. Besides this, the demand of the product supplied by the supplier is higher which
reinforces their position against the business.

Competitor Analysis
Competitor analysis in the strategic and marketing management is said to be the
evaluation of the weaknesses and strength of the potential and current rival in the industry.
This analysis offers a defensive as well as offensive strategic context in order to recognize the
threats and opportunities. Competitor analysis is generally called as the most significant
corporate strategy component (Upson Ketchen Jr, Connelly & Ranft, 2012). In the
automobile equipment’s and accessories manufacturing industries there are limited number of
players who raise the competition for ARB Corporation due to which company is involved in
different strategies such as promotion, etc. Some of the key competitors of ARB Corporation
are TJM Products Pty Ltd, Cequent, WARN Industries, etc. (Roger Montgomery, 2014).
Competitor Industry
Profile
Services/
Products
Strength Weakness
es
ARB
Corporation
Most of the
revenue of the
company is
generated from
the Motor
vehicle parts and
accessories
manufacturing
(Bloomberg,
2019b)
Company is
involved in the
distribution and
selling of the
accessories of
the motor
vehicles and
light metal
engineering for
the four wheel
vehicles
The strength of
this company is
its broad
distribution
network and
number of
outlets.
The company
has yet not
expanded its
scope in the
research and
development
in comparison
to other
players.
TJM
Products
Most of the
revenue of the
Company is
involved in the
The major
strength of this
Considering
the scope of