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Five Forces Model For Industry Analysis

1623 words - 6 pages

Five Forces Model for Industry AnalysisNew EntrantsThe online bookstore industry that Amazon.com has pioneered in was, at first, very hard to penetrate. There were different barriers such as distributing capabilities and the variety of the selection offered that are supposed to be hurdled. Amazon successfully solved the tricky parameters as being the first one to get into the whole idea of online retail. With being the first, they had the luxury to set what were the norms for the industry. Factors that may lower these barrier tactics would be a wider selection and the ability to go to an actual bookstore to exchange or return books or other products. This network of "actual" retail spaces makes it easier for the consumer to return or exchange the products they were not satisfied with. These handicaps of Amazon were the basis for the emergence of book retail giants Barnes and Noble and Borders in the online shopping industry.Industry CompetitorsThe major competitors of Amazon are Barnes and Noble and Borders. Barnes and Noble is a retail giant offering books and CDs both in their outlets all over the country. It opened their online industry in 1997 and has become the fourth largest e-commerce sites today.Focused largely on the sale of books, music, software, magazines, prints, posters, and related products, the company has capitalized on the recognized brand value of the Barnes & Noble name to become the second largest, and one of the fastest growing, online distributors of books. Their "advantage" to Amazon is the brand name and the availability of actual retail outlets in which consumers could go in to exchange or return products easily. They also have an established book selection based in their retail operations.Borders is another multi-media retail store found in major cities around the country. Started out as a small bookshop in the college town of Ann Arbor, Michigan, it has since expanded into one of the finest bookstores. In 1992, Borders was bought by the Kmart group which further flourished the company into a Multi Media Giant with a wide selection of Audio, Video and Books found throughout the United States.The Online Bookstore industry have become a fierce business which involves discounts, varied selections and fast delivery in which all three companies are challenging each other.BuyersThe consumers of this industry can be found in every corner of the population. These are mostly people who have had some form of higher education and have access to the Internet and computers. The segment of online shoppers has increased dramatically in recent years due to the convenience of shopping in the comforts of the home and the accessibility of the Internet. These developments have made it easier for consumers to log on and buy on the Internet. Consumers also tend to compare prices among the retail leaders such that buyers are able to buy products with very big discounts compared to ones bought in "actual" retail outlets. The bargaining...

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