MM576: Marketing Management Assignment - Porter's Five Forces & PLC

This assignment explores key marketing concepts, focusing on Porter's Five Forces model and the Product Life Cycle (PLC). The first part analyzes the competitive environment of the Hong Kong banking industry, specifically the Bank of East Asia, using Porter's Five Forces to assess threats from new entrants, competitors, substitutes, and the bargaining power of buyers and suppliers. The second part delves into the marketing mix, emphasizing the importance of the product and its life cycle stages: introduction, growth, maturity, and decline. The assignment also uses City Telecom as a case study to illustrate the application of PLC strategies. The analysis includes discussions on the usefulness and limitations of the PLC model, offering a comprehensive overview of marketing strategies and competitive advantage.

Marketing & Management

MARKETING 1
Question 1
Porters Five Forces Model
Michael Porters is an American academic who is known for his theories and models
which is related to business strategy and social causes. The leader implements the different
strategy but its main strategy is related to the competitive advantage. He introduced the Porters
strategy that helps the company to gain the competitive advantage. There are two models which
are related to competitive advantage such as porters five forces model, and porter generic
strategy. In porter’s generic strategy, there are three strategies that the company has to implement
for competitive advantages such as differentiation, cost leadership and focus strategy (Porter,
2008). In the real life, Bank industry of Honkong has been taken into consideration to understand
the model of porter’s five forces that helps to gain the competitive advantage.
Porters Five Forces Model
Porters Five Forces is a framework that helps to identify and examine the five
competitive forces that shapes each and every industry. It also helps to evaluate the industry
weaknesses and strengths which is required for the company to examine in order to survive in the
market for long term basis. This model is applied in different segments of the economy that helps
to learn the level of competition within the industry and improves the long term profitability. It is
also known as Harvard Business School Professor, Michael E. Porter. It is a analysis of business
model that supports to explain the various industries that are capable to sustain the different level
of profitability. The Bank of East Asia also implements this model to attain the competitive
advantage (Bell, Dyck, & Neubert, 2017).
The Bank of East Asia

MARKETING 2
The Bank of East Asia Limited is a Hong Kong based banking and financial services
company. It is the largest self-governing local Bank of Hong Kong. It is one of two remaining
family run Hong Kong banks. The company gets the high brand image in the market and
recognized as the largest bank in Honkong Market (BEA, 2019). The company attains the
competitive advantage in the market and it also implements the porters five forces model in order
to shape the competitive forces. The Porters Five Forces Model has been implemented in the
organization to examine the industry and competitive environment.
Porters Five Forces On the Bank of East Asia
The threat of new entrants
The threat power of new entrants is high as it required the high capital to establish the
business of Bank. It is not possible for an individual to invest the large amount for establishment
of Bank that is why; it required to have one or more partners that help to invest in the company.
The other challenge that the new entrants is face the legal obligations. It is observed that the
government of all over the world and the government of Honkong put high restriction on the
banks related to registration of the Bank. No one can easily establish the business in the Banking
industry they faces the challenges because government would not allowed to anyone to open the
financial institutions. These are the reasons that define the risk level of new entrants
(Rothaermel, 2017).
The threat of competitors
The three degree of competitors is moderate as there are limited numbers of banks in the
banking industry of Honkong but those all the banks try to beat each other in order to beat in
competition such as Hang Seng Bank Limited, Commercial Bank Plc, Fubon Bank Limited and

MARKETING 3
the others. These are the competitors in the market that provides the financial services to public
due to which the competition for banking companies in banking industry of Honkong has been
increases.
The threat of substitute
The threat degree of substitute is low as there are no other companies that provide the
similar services related to the financial activities. It is observed that the financial institutions
always provide the finance related services such as loan, deposits in different categories and the
others. The other companies cannot replace the financial institutions as it is not able to offers the
similar services to public.
Bargaining Power of Buyers
Negotiating power of customers is high as there are limited number of banking
companies that provides the financial services. Each and every bank provides the different offers
with the similar services such as discounts, interest rate and deposits terms and condition, and the
others. These different offers attract the more or more consumers in the market that provides the
similar services to customers (Johnson, 2016).
Bargaining Power of Suppliers
Negotiation power of suppliers is low as the suppliers of these financial institutions are
the government, shareholders and public. These are the suppliers that offer the similar services to
public. These suppliers deliver the services to the financial institution without any extra demands
and arises conflicts. The company also has to provide the high amount of return to shareholders
so that the suppliers getting attractive towards it and invest in it.

MARKETING 4
According to the Porters Five Forces Analysis, it has been found this model helps to examine the
market environment and also the competitors. After the examination of the market environment,
it is observed that the company implements the Porters generic strategies so that it attains the
high competitive advantage in the market (Salavou, 2015).
Question 2
Marketing Mix defines to set of activities that have been used to support the product in
the market environment. There are 4Ps such as price, product, promotion and place that helps to
design the product strategy to attain the objective. These four Ps not only helps the company to
attain the objective but also helps to promote the services in all the over the world. According to
marketing mix, good is the main component as the whole marketing mix is depended such as
product, price, place and promotion. This marketing theory defines the whole product due to
which it is required for the consumer from product quality to it is prices. In order to understand
the product strategy, Product Life Cycle is the concept that defines the good strategy.
The concept of Product Life Cycle includes the 4 distinct stages and these are
introduction, maturity growth and decline. Each and every stage is recognized with variations in
the products marketing situation. The company uses the numerous marketing strategies in every
phase to try enhancing the value of product in the market for long time. The first phase is the
product life cycle is introducing the product in the market. In this stage, there are four ways in
which the company can launch the product in the market such as rapid skimming, rapid
penetration, slow skimming, and slow penetration. According to the introduction strategy, the
company has to establish a clear brand image, with the product features and quality that attracts

MARKETING 5
the consumers towards its services and also helps the customers to promote the services in the
market (Ni Business, 2019).
Product Growth Strategies is the second phase of Product Life Cycle. The marketing strategies of
product are used in growth phase that main aim is to arise the profits. The common strategy that
are used in this stage is to improve the product quality, adding the new products, enter new
market segments, increasing distribution channels, shifting marketing message and skimming
product prices and the others. This second stage strategies helps to enhance the value of product
in the market. Growth stage not only enhances the product value but also helps to increases the
sales of the product and also the market share. It company gain the maximum opportunities with
these strategies (Holzbaur, Ross, & Rothrock, 2016).
After the growth strategy, the company has to switch with the other segments or to
develop the product at the different level. Product Maturity Strategies is the third phase of
Product life cycle as it enters the maturity stage. It reflects that the market will be saturated and it
also needs to change the marketing strategies to prolong the life cycle of product. The common
strategies that can assist during the phase fall under one of two groups such as market
modifications and product amendment. Market modification includes the new market segments,
winning over competitors, converting non-users. Product modification includes the improvement
in products features, qualities, pricing and differentiating from the other company’s product.
These companies helps the product to grow in the market with the differentiate strategy and also
helps to gain the competitive advantage. The differentiate product or existing product in the new
market segments attracts the consumers towards its services due to which it can easily attain the
competitive advantage (Ciambrone, 2018).

MARKETING 6
Product decline strategy is the fourth stage of Product Life Cycle. In this stage, it is
required to examine the decreasing sales and profits. It causes the changes in customer
preferences, technological advances and alternatives. After the evaluation of sales and profit, the
companies can implements the strategies due to which it can improve the quality of product
(Thompson, Strickland, & Gamble, 2015).
These four strategies of product life cycle mainly focus on the product as according to the
strategies that company can achieve the competitive advantage in the operating market. This
process or concept also defines that the product is a major part of marketing theories as it is
important element to operate the business. Without the product, the company cannot operate the
business at the international level.
In the real life scenario, City Telecom is a Honkong company that implements the four
stages of Product Life Cycle (SmartCity Telecom, 2018).
City
Telec
om

MARKETING 7
According to the diagram, it has been seen that the company at the maturity phase of
Product Life Cycle. The demand of the business is high as the people are more trends for the
internet and telecommunication activities. In this stage, the company has to add some new
features according to the demand of consumers as the demand of consumers has been fluctuated
due to which it face the challenges. The brand image of the company is high due to which it also
has the opportunity to add new features and attracts the consumers.
The usefulness of concept of PLC is more flexibility. It has been seen that the company
has more flexible according to PLC because it can add new features and services due to which it
affects the business. The other usefulness activity of the PLC is the shorter project time.
According to shorter project time, it is observed that the company changes its features and
services in short period of time by evaluating the environment.
The limitation of PLC is to varying the market conditions. The market condition of the
company is to vary from place to place due to which this concept is not suitable. The fluctuation
in sales also affects the business and it is very difficult to predict the sales in future and it also
difficult for the company to implement the PLC concept on the company (The Investors, 2019).

MARKETING 8
References
BEA. (2019). Company Profile. Retrieved From: https://www.hkbea.com/html/en/bea-about-bea-
company-profile.html
Bell, G. G., Dyck, B., & Neubert, M. J. (2017). Ethical Leadership, Virtue Theory, And Generic
Strategies. Radical Thoughts on Ethical Leadership, 113.
Ciambrone, D. F. (2018). Environmental life cycle analysis. CRC Press.
Holzbaur, E., Ross, J., & Rothrock, T. (2016). Epro Product Life Cycle: Guidance For A Successful
Management Phase. Value in Health, 19(3), A109.
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
Ni Business. (2019). Product life cycle. Retrieved From:
https://www.nibusinessinfo.co.uk/content/product-life-cycle-strategies
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review,
86(1), 25-40.
Rothaermel, F. T. (2017). Strategic management. New York, NY: McGraw-Hill Education.
Salavou, H. E. (2015). Competitive strategies and their shift to the future. European Business
Review, 27(1), 80-99.
SmartCity Telecom. (2018). About Us. Retrieved From: https://www.smartcitytelecom.com/about-
us/
The Investors. (2019). Product Life Cycle (PLC). Retrieved From:
https://theinvestorsbook.com/product-life-cycle-plc.html#Disadvantages

MARKETING 9
Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.