Five Forces Analysis-US Express Mail Industry Essay

The following analysis of Porter’s 5 Forces Model will help in determining the threats that my be present now or in the future and help determine opportunities and decisions regarding the marketing plan.

During the 1980s, the air express industry was a medium to attractive industry to already be a major player in, but not a very attractive industry to try and break into. The industry can be characterized by high rivalry from competitors who compete on the same services with very little differentiation, medium power from suppliers who supply the resources necessary to run the business, high buyer power because customers can basically find an equal service from any firm in the industry, low substitution threat from other means of shipping transportation, and low threat of new entrants due to the high initial capital outlay and need of management

Threat of new entrants is relatively low. There are high barriers to entry in the discount retail market, including high capital costs, limited access to investors, and a largely crowded-out market place.

The overall threat of new entrants in the retail market is a high level threat as it is relatively easy and inexpensive to enter

To assess the industry structure and profitability, a Five Forces analysis will be conducted on the department store-retail industry.

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

Threat of New Entry: Overall there is not a great barrier to new entry but because of the stiff competition at the top new entrants have had struggles.

In the US Express Mail industry, the buyers fit into two segments: businesses and individuals. Express Mail has become the industry standard in some industries such as banking, consulting and financial services since the items inside the package had a high ratio of value to weight. Businesses needed to be able to track the packages and be assured that it arrives on time. That being said, businesses were often high-volume buyers since the shipping managers identified which firm to deal with and concentrate the high-volume of shipments to that firm for a particular project or for the time being. Sales representatives from the firms had to negotiate with stingy shipping managers who sometimes demanded the upwards of 50% or more discounts. The existence of many large volume buyers meant that the buyer power is high. Similarly, individuals also held high buyer power since the Big Three and other second-tier postal services offered largely undifferentiated services.

DHL 31%, USPS 8%, FedEx 27%, and Amazon 3%. From these numbers Amazon is a very small player in the shipping department. Every competitor, expect DHL, are currently shipping the excess freight that Amazon cannot maintain. With Amazon 's move to acquire more of the market, these competitors need to be on the lookout because portions of their market share can be taken away. These major shipping firms only provide shipping services not offering household products like Amazon. With Amazon starting by semi-supplementing their shipping avenues, Amazon has the potential to grow even larger. The market cap numbers are not a good basis to judge market share on since FedEx and UPS have the majority of the market in the shipping industry. FedEx and UPS are the major competitors against Amazon and its new shipping department. FedEx and UPS had the most recent annual net income of $50.3 billion and $58.3 billion respectively. They represent the majority of packages delivery from individuals, businesses, and online retailers.

The express mail industry can easily be considered an inherently tough industry to operate within given the myriad of factors that come into play, such as unions, government regulations, cost of technological advancement, and international borders to name a few. Despite this, the industry could be seen as offering opportunities, which could be seized by attracting customers based on the quality of the service being offered. Consequently, this also encouraged mimicking between

The barriers for this industry are high. When looking at the five forces the first to consider is the thread of substitutes. Other modes of transportation could pose a threat but would be dependent on your perspective competitive advantage point. Rail and bus are threats for land travel and boat and ship pose a threat for marine travel. As far as bargaining power of buyers, this industry faces strong buyers powers due to the presence of existing buyers as well as advancements and innovation in technology. The barriers to enter the industry grant high bargaining power to the suppliers and some aircraft are only available by a few suppliers. The competitive rivalry is high because of the different competitive strategies that are employed for market share increases. The growth rate within the incrase is low and fixed cost within the industry are very

This worksheet was developed to apply Porter’s Five Forces analysis to an industry. For each of the factors listed below, place an “X” in the appropriate column (Yes, No or Moderate). Once you have completed the analysis of the five forces, compute the number of factors for each category, and write down the number for the overall analysis.

Porter’s 5 forces analysis is an important framework that helps understanding both the strength of the current competitive position and factors affecting the strategy development of the company. It tells us where the power dwells in the business situation. However, we will use the PESTLE analysis in this paper because it is a very useful framework to business leaders: it helps them build their vision of the future. Amazon is the largest online retailer in the world, therefore the company is well aware of their achievements and their ongoing success.

Porter 's Five Forces Framework is a tool for analyzing competition of a business of an industry in terms of its profitability. The most unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit levels. The five-forces perspective is associated with its originator, Michael E. Porter of Harvard University. This framework was first published in Harvard Business Review in 1979.

Threat of New Entry: The threat of new entry is at a minimal since the market is mainly dominated by OSIM, OGAWA and OTO. For a new brand to enter this market they will have to have significant capital, the tenacity to face reputable brand that have a foot holding in Singapore and technologies that surpasses OSIM.