Porter orange

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ORANGE for mobile market:

Evaluation des forces de PORTER

The intensity of rivalry: Very high, because there are only 3 actors for the moment (4 soon with Free), with ahuge number of potential customers. The loyalty is the key success factor on this market, so the companies are fighting to retain their customers, and to attract new customerwith superior or better offers (because the cost of retaining is cheaper than the cost of acquiring new customers). There is a low level of product differenciation. To finish, themarket increase and companies are making benefits, it contributes to increase the intensity of rivalry.

Substitutes: Low because the product demand is not really affected bythe price change of a substitute product. All the offers have almost the same prices. The demand isn’t really elastic because it is difficult to change the product and peopleprefer to adapt their forfeit.

Buyers: Low because consumers have no bargaining power. The offers are fixed by the companies, because they know that mobile market is essentialin the life of the buyers, so even if the price would be higher, the consumers would still buy the offers. There are so much buyers that the companies only want to retain them,but they have no power at all.

Supplier power: High, because the slots for obtaining a Hertz frequence are very limited and expensive, so the companies have to fight toextend their network capacity to have the best cover for mobiles.

New entrants: Low because it is the government that gives the licences. The price to obtain those licences isvery high and the capacity for the government to give Hertz frequences is limited due to their limited number. Indeed, the army takes the main part of Hertz frequences in France.