BUS30009: External Environment and Industry Analysis of FBA

This report analyzes Family Business Australia (FBA) by examining its external environment and industry dynamics, focusing on the application of Porter's Five Forces model. The analysis evaluates the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and the rivalry among existing competitors. The report highlights the impact of these forces on FBA's strategic decisions and competitive advantage, discussing factors such as the higher bargaining power of buyers due to numerous substitutes, the lower bargaining power of suppliers, the moderate threat of new entrants, and the higher threat of substitutes. It also addresses the high rivalry among competitors and suggests that FBA should focus on lower fixed costs and effective leadership to sustain its business in the marketplace. The report references key literature to support its findings, providing a comprehensive overview of FBA's industry position and strategic considerations. The report also mentions key factors like technology, location, and competitive benefits.

Running Head: FBA
FBA

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Table of Contents
Background of FBA (Family business Australia).................................................................................3
Porters five for Model and their effect on FBA.....................................................................................3
References.............................................................................................................................................5

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Background of FBA (Family business Australia)
Family Business Australia (FBA) supports the family for operating their business in the
specified market and get higher success. This organization addresses the expert family, and
modern tool services and create an opportunity for them to start a business. It also offers
training to the family in developing the business as it considers many key people like Family
Business Owners, Family Business Emerging Leaders, Family Business Leaders, and Family
Business Advisers (Family business Australia, 2019)
Porters five for Model and their effect on FBA
The porters five force model is used to evaluate the situation of industry and supports to make
a favorable decision in the context of the organizational decision. From the evaluation of this
factor, it is found that there are different factors that are considered by FBA like bargaining
power of buyer, bargaining power of suppliers, the threat of new entrants, the threat of
substitutes, rivalry among existing competitors. These are discussed below:
Bargaining power of buyers
The bargaining power of the buyer is higher that demonstrates that there is a higher number
of substitutes products in the market of the same industry. It is addressed that the buyer of
this industry has higher knowledge of the services of the organization (Diaz-Fernandezet al.,
2017). The higher bargaining power could also be demonstrated that the buyer is capable
have different services on lower prices with higher quality. FBA could focus on the quality of
products and services and make the possibilities of getting higher competitive benfit.
Bargaining power of suppliers
The bargaining powers of suppliers are lower because there is a need for huge amount of
money to invest in this industry. There are certain reasons that might be the cause of lower
bargaining power named a small number of suppliers as compared to the buyers, lower
suppliers switching cost, and buyers believe to have the services of sales from the suppliers

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(Hassan and Mahmood, 2016). Family business Australia would be successful by considering
the stakeholder management strategy.
Threat of new entreats
The threat of new entreats is moderate that demonstrated that there are certain factors that
might create this situation like higher initial capital investment, a technology issue, location
issue, and higher possibilities to get higher competitive benefits. Family business Australia
has used the latest technology and increase the possibilities of business success in Australia.
Threat of substitutes
For this industry, the organization has a higher threat of substitutes as it considers many
factors like lower switching cost, similar product quality, and the performance of substitutes.
The could face quite a competition in this situation. Hence, FBA should need to make higher
quality products and services that mandate to the organization for getting a favourable result.
Rivalry among existing competitors
From the evaluation of this factor, it is found that there is higher rivalry among the existing
competitors for this industry (Paauwe, and Boon, 2018). There are certain factors
demonstrated the higher competition level like industry growth is slow, fixed cost is high,
competitors have equal market share, and exit barriers are high. But, at the same time, it is
also found that FBA should have a lower fixed cost and effective leader for operating their
business as it would support to sustain the business in the marketplace for the long term.

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References
Diaz-Fernandez, M., Bornay-Barrachina, M. and Lopez-Cabrales, A., 2017. HRM practices
and innovation performance: a panel-data approach. International Journal of
Manpower, 38(3), pp.354-372.
Family business Australia (2019). About us. [Online] Available at
https://www.familybusiness.org.au/ [Accessed on 05/04/2019].
Hassan, S. and Mahmood, B., 2016. The relationship between HRM practices and
organizational commitment of employees: an empirical study of the textile sector in
Pakistan. International Journal of Academic Research in Accounting, Finance and
Management Sciences, 6(1), pp.23-28.
Paauwe, J. and Boon, C., 2018. Strategic HRM: A critical review. In Human Resource
Management (pp. 49-73). Routledge.