Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties or limited to specific, pre-qualified participants. Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. At the Event Management Company these business models are very important us.
Through B2B we take bookings from other businesses to stage events and also we buy our materials for staging events online through this medium. Using the B2C we can sell our business to the customer allowing them to choose what event and speciality needs they are looking for. E commerce has helped us as we are able to conduct business 24/7 365 days a year. We also have access to a global marketplace, speed of messages and an opportunity for us to reduce costs by bypassing wholesalers.
Porters Five Forces
Porters five forces analysis is a framework for the industry analysis and business strategy development. It uses concepts developed in Industrial Organization economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. How these Forces have determined our current position in the market?
1. Buyer Power
When buyers have many choices there power increases but when choices are few and far between their power diminishes. With the Event Management Company our buyer power is very high as we have a wide variety of manufacturers to buy materials from for staging events. We are able to shop around and get the best possible price for the products. There is a limited amount of companies staging events in Ireland and this gives us a lot of customers but we still try to keep a competitive advantage over our competitors by offering a high quality service guaranteed to be the best. Another way of keep our customers is by offering them 10% off their next booking of an event with us.
2. Supplier Power
Supplier choices are high when buyers have few choices and are low when the choices are many. At the Event Management Company our supplier power is low as we have a lot of choices for materials for staging our events. Scaffolding, Curtains, Carpets, Lighting etc. are available in abundance meaning we can really shop around for the best quality and best deals. As a Supplier is buyer power is high as people in Ireland dont have many options for staging events.
3. Substitute Threat
The threat of substitute products or services is high when there are many alternative products or services, and low when alternatives are few. For us substitute threat is low as there arent many companies in Ireland able to offer the same high quality service by fully qualified people. We do know that we have to keep a competitive advantage over these companies and do this by switching costs. Customers are offered to buy limited shares in the company meaning if they chose to do so they will be reluctant to leave us.
4. Threat of new Entrants
The threat of new entrants is high when it is easy for new competition to enter a market and low when there are significant entry barriers. For us the threat of new entrants is very high as companies in The UK and North America have started to take notice of the Irish Market. Also wanting to have a good base for the European market and cheaper taxes for foreign investment is beginning to entice these companies. Also more and more people in Ireland are graduating from design and event staging courses making them very curious about starting new companies. We are very aware of this.
5. Competitive Rivalry
The rivalry among existing competitors is high when competition is strong in the market and low when competition is complacent. Competitive Rivalry is low for our company as there is very many innovative companies out there but we are aware that it is only a matter of time before this changes so why are very focused on keeping a competitive advantage by offering loyalty schemes connecting to our suppliers through IT and offering low prices on certain events.
Where we stand in the Marketplace?
On a whole our company is in a very healthy position with high buying power and low supplier power we can get the best materials while keeping our costs down. Low substitute and competitive rivalry gives us a very good customer base. WE are very wary though of the threat of new entrants though and are always pushing ourselves to have the best competitive advantage and produce the best events. In the Marketplace we are seen as a very high quality and reasonably priced company who deals with its customers fairly and has excellent customer support. This will see our company strive forward in the future.