The paper “ Role of Technology in Relation to Porters 5 Forces - a Role of E-Business in Creation of New Economy” is a thoughtful variant of the article on marketing. Porter's five forces of competitive advantage include; the threat of substitute services of products, suppliers' bargaining power, buyers' bargaining power(channels, end-users), and lastly existing rivalry among the existing competitors. The threat of substitute services and products arising from the internet expanding the market size. The Internet makes the industry more efficient by eliminating entry and exit to the market.
Market size expansion creates threats of substitution for the industry. The buyers are provided with a wide variety of services and products. This threatens the real services and products in the industry. Sometimes the new services and products are of low quality and the customers cannot easily differentiate them. Substitution threats emanate from the idea of internet proliferation. This section will discuss the five forces of porter’ s sources of competitive advantage. There will a critical approach to the forces in relation to the internet application. Competitive advantage is borne by effective internet applications.
Subsequent revolution in the applications of the internet will yield value creation in the industry. Effective barriers to entry include economies of scale and high product/service differentiation. This makes it hard for new entrants as the cost is too high for both sellers and buyers (Porters, 2003). The Internet gives sellers bargaining powers. Sellers can have a competitive advantage in relation to the procurement of services and/or products. Suppliers use the internet to get additional suppliers and increase their bargaining power. This is attributed to wide access to information about the market.
Internet links suppliers with end-users of their services and/or products. The direct link is useful in minimizing the leverage of intervening companies. Sellers' operations through the internet reduce unnecessary market malpractices. Sellers do procurement through the internet.
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