Porter’s competitive five force’s model as provides a useful stepping stone for an organization to identify its competitive position. Consumers are at the stage where they mane valid requests and are definite key stakeholders in companies. Acme appears to have taking this on board from the start by ensuring that it provides its customers with varied products and different designs. Acme Whistles exists on a global scale and it sufficiently able to defend its position against new entrants.
The forces will allow Acme to determine where the company stands versus its buyers, suppliers, entrants, rivals and substitutes. Anticipating and exploiting shifts in the forces; and shaping the balance of forces to create a new industry structure that is more favourable to the company.
Ease of Entry by competitors into the market
As previously stated in the afore-mentioned Acme Whistles has an advantage over its competitors as it has not only gained a level of popularity but has had a level of longevity in its particular industry which makes it that bit more difficult for its competitors. Equally having patented designs which are individually tested as well as various designs, research and development and set up costs make it that more difficult for a potential competitor.
The bargaining power of customers
Customers in Acme’s market do not have as much buyer power as other industries. With the engraved whistle, there are other manufactures but Acme is able to offer it at a cheaper price as it has the existing foundation to do so. Equally the uniqueness of each design does not easily allow the buyer to switch to another producer and the large of buyers reduces any potential power.
The bargaining power of suppliers
Evidently Acme is at a stage where it has an established relationship with its suppliers. With customers not being in a powerful position; it makes it harder for the supplier to resort to a powerful position and with diverse niche manufacturers
Availability of Substitutes
Now with the case of the engraved whistle the main competition will only have a major impact if it is not from within the company. There are various substitutes of this particular product therefore the major threat would possibly come from a price competition.
Level of existing competitive pressure
Although the competition is there especially amongst the lower level whistle producers, competition directly against Acme Whistles Ltd is not as rife. Evidently Acme Whistles Ltd has managed to create a competitive advantage for itself. Therefore, to an extent Acme acts as the leading firm. Evidently key factor for Acme Whistle is its product differentiation and cost efficiency.
Although the Porter’s Five Forces provides the tool that allows an analysis of profitability and competition it is not able to rope in the profound changes in the industry such as the recession.