2.6 COMPETITIVE ANALYSIS:
PORTER`S FIVE-FORCES MODEL
- Rivalry among competing firms:
During the investigation made there were very few formal established competing firms that offered the delivery massage services; it was found that the service of delivery massage was offered mostly by particular persons who don’t have a formal business to compete, the competition between these people consist in price war and posting their services as classified publication through social web pages were they try to convince customers about their professionalism and experience to gain customer´s confidence and thus get more clients.
Now, talking about the formal organizations that were found “siempre joven spa” and “wellness spa móvil” it was seen that these organizations offer a complete catalog of services for people to take in their own houses, both of them offer things like combos offering more than on service for example massage and manicure for less money, in addition, it was found that they not only offer massages or beauty services, these organizations also offer advices for people wellness and they do events for marriages, birthdays, anniversaries and other special events, it is to take in to account that “siempre joven spa” works only with delivery services, while “wellness spa” has a headquarter in which it also offers it services despite of the fact that they are more focused on delivery services.
- Potential development of substitute products:
Since refreshing breeze spa is a starting organization, their main service is the delivery massage; however, in contrast with the competence it is evidenced a clear disadvantage against the formal established organizations that have way more experience and offer a more complete service to the customers, thus, refreshing breeze could be considered as an emerging substitute product for the other organizations.
- Potential entry of new competitors:
Given the situation that there are not relevant government barriers to enter the industry it is kind of easy for a person to start offering the massage services which is a very common situation in Bogota, however, these people doesn´t represent a great threat for the big organizations, the strongest barrier for entrepreneurs wanting to create a business is the economic one, because to become a solid and strong organization with a recognized brand a lot of inversion is needed, on the other hand, abroad organizations can enter to the industry very easy because there are not enough organizations and thus the competence barrier is not strong.
- Bargaining power of suppliers:
In consideration of the fact that Refreshing Breeze is an emerging organization on the industry, it doesn’t have enough money to bargain with suppliers an economic price for big amounts of products needed to perform the job which is something that the more experienced organizations do have and thus, it represents a disadvantage for the company since it will not get the lowest prices from suppliers. Another fact that could be more favorable is that there are a great number of suppliers for massage articles that could be interested in bargaining a good price for their products also meaning that switching suppliers wouldn’t be so expensive as there are a lot of suppliers in the market.
- Bargaining power of consumers:
Bargaining power of consumers means that the consumer has the power to make an organization competitive or not by deciding whether to acquire its products/services or favoring the competition.
According to the information above it is clear that for the company to gain loyal customers and to earn bargaining power with consumers it will be necessary to offer a service as good as possible at a competitive price so consumers will prefer the company rather than favoring the competition.