c) which means that a company has greater power

c) Analyse the Porter’s Five Forces of the chosen company

The five forces model of analysis was established by Michael
Porter to analyse the competitive atmosphere in which company or invention are
works. Besides that, it also help to determine and industry’s strengths and
weaknesses. Porter’s theory can be applied to any sector of the economy to
indicate for the attractiveness and also profitability.

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This model is also broadly used to analyse the
organization structure of a company as well as its business strategy. Porter
has identified five indisputable forces that show a part in determining every
industry and market around the world. The forces are also commonly used to
measure competition concentration. These forces are included threat of new
entrants, bargaining power of buyers, threat of substitute services and products,
bargaining power of suppliers and rivalry among existing competitors.

For the rivalry
among existing competitors is about the number of competitors and their
ability to creep up a company. The amount of competitors more large, along with
the number of corresponding goods and services the competitors offer, and will
lead to le less power of a company. When competitive rivalry is low which means
that a company has greater power to perform to achieve higher sales and gain
more profits. If the competitors offering homogeneous products and services
will lead to lower market attractiveness.

For the factors of threat
of new entrants is about a company’s power that affected by the force of
new competitors into the market. The less amount of money and time it costs for
the competitors to enter a company’s market and it may be an effective entrants.
In the other ways, an industry with strong barriers to enter is a gorgeous
factors for a company that would choose to run their business in segment with
less competitors.

The forces of bargaining
power of suppliers is addresses how straightforwardly those suppliers can
increase the price of products and services. It is caused by the number of
suppliers of key features of product or service that about how special these
features are and also how much it would be cost a company to change from one
supplier to another supplier. The less number of the suppliers with the more a
company depends upon the power seller holds.

For the factors of bargaining power of customers which is about exactly deals with the
capability customers have to drive the amount of price become down. It is cause
by how many consumers and buyers that a company has and how major each consumer
is and also how much it would cost a customer to shift from one company to
another company.

For the last factors in Porter’s five forces
which is threat of substitute services and products. The competitor
substitutes that can be used in the position of a company’s goods or services
pose a threat. For instance, if a customer depend on a company to offer a
service or tool that can be replaced with another service or by acting out the
task physically. If this replacement is properly easy and low cost may lead a
company’s power to be weakened.

 

·        
Bargaining power of suppliers

Vivo Smartphone Company as a new entrant in the high technology
industry and facing a reliability gap and uncertainty among their possible
suppliers. The insight about Chinese smartphone companies are producing low
price simulations of Apple products that making them vacillate. However, Vivo
started some strategies to boost its trustworthiness but from those strategies
such as open-innovation is the one that got from their right suppliers’
associations. Vivo’s importance on its unfamiliar business model was the key
feature to give the sellers further assurance in Vivo smartphone. For the
example Vivo is using Hi-Fi in its smartphones brand which is about a high
quality of sound created by hi-fi chips. Mobile chip maker agreed to supply
this processors because Hi-Fi sound quality of Vivo phone give a great
experience that is never make out before. The supply chain had been energetic
to Vivo’s future improvement, it has been depending on others countries for the
association and technology. Nowadays, Vivo has verified in more than 100
countries and regions as their brand with provide the best class technology around
the world of smartphones. Thus, Vivo also a substantial customer to their
sellers, therefore it consists of a stronger bargaining power than the
company’s suppliers.

·        
Bargaining
power of buyers

First and foremost, in the smartphone
industry, as a consumers they can easily change their brands given by the large
number of the competitors in the market. Vivo has own their target and specific
consumers such like people who want to purchase affordable with high quality
smartphone compare to other like Iphone. Nonetheless, from the research that
stated about with a current purchasing power of almost 17,000 euros per capita
in Germany market with every third person owns a smartphone and approximately
80% of the new mobile phones are sold in Androids system. Hence, Vivo
Smartphone Company has offering high quality mobile phone at the competitive
prices and this will be one of the major advantages, along with the
circumstance that Vivo comes with the new operating installed system. An
android system connect that agrees hundreds of thousands of progressive strong
consumers to modify and create new features. By given the capability of Vivo to
exercise open innovation and figure out a community of consumers, it would be
more success implement loyalty among its users to cut down the opportunity of switching
the smartphone brands.

·        
Threat of substitute
services and products

Smartphones consist of two primary functions which is to
ensure people can connected through communication and the other one is ability
to distribute and contact to share information immediately. The substitutes can
accomplish one or more of these purposes include social networking, emails,
internet services and others. Since the key substitutes product for mobile
phones are laptop, tablets and Ipad, so the threat of substitute should be
considered as low because of the additional multi-functionality services and
also the application using by the smartphones have over sole presented
technology products. The differentiates of Vivo from its substitutes and the
competition is Vivo has its own perfect sound quality and vital photography
with cutting-edge technology with developing vibrant and modernization products
for passionate youthful.

·        
Threat of new
entrants

Since now is a technological era, the entry barriers for
the mobile phones industry is quite high because of many matters are obligatory
to be more success. Moreover, the market is soaked with the huge amount of
capital that must be invested in the company. It is also to be considered to
entry a smartphone industry, one of the features is their operating system.
Vivo have their own Hi-Fi audio chips in smartphones, and it is compatible with
high quality and best possible audio experience to the consumers. The costs of
production for the mobile phones actually are quite high and this industry are
obligatory economies of scale. For the product of Vivo company produce such as
camera also signified one of most important competitive advantages to their
company because the photography is one the way for people to express and share
happiness with others.

·        
Rivalry among
existing competitors

With
major brand entrants such as Samsung, Xiaomi, Huawei and Oppo are challenging
and controlling in the smartphones industry so the competition is quite high.
For the new competitors, they will find that it is very difficult to compete
and achieve economies of scale and also market share among those brand
competitors in the same industry. As can be said that, in this technological
era, smartphone industry is one of the competitive environment with many
choices according to the users’ requirements and budgets. Competition is
passionate among their existing companies although there is no so much
differences in their own products, but the companies try to come out their new
product in terms of services and application they obtainable. From the Vivo
company strategy throughout their mobile phones, they propose consumers a
specialised with high grade photography solution by taking high quality mobile
photography to the achievement of a nice picture. It is also come along with
observing and recording all of the life’s marvellous moments compare to other
brand in the industry.

In the conclusion, this Porter’s Five Forces can allow Vivo Company to regulate its business strategy
in a better practice of its resources to produce advanced earnings from its
investors.