Threat of New Entrants: Quite high. This is mainly because, anyone looks as if they're making a sustained profit, new competitors can come into the industry easily, reducing profits. The underlying factors that increased such threat of new entrants to the business of Brothers furniture ltd. are: * No technology protection * Low barriers to entry * Moderately expensive to enter the industry * Some economies of scale * Some cost benefits if in business for some time
Competitive Rivalry: Extremely high. This is because, there are too many furniture producers already doing business in the market offering similar products and promotions at a similar price. So if someone raises prices, they'll be quickly undercut. Intense competition puts strong downward pressure on prices. The underlying factors that aggravate such competitive rivalry of the business of Brothers furniture ltd. are: * Many competitors * Similar products * Low switching cost * Low customer loyalty
Supplier Power: Low. This is because as there are too many suppliers already in the market, the power of suppliers to increase the prices of the inputs to the furniture business is low. The underlying factors for such phenomenon are: * High number of suppliers * Suppliers large * Similar products * Able to substitute * Able to change * Able to import
Threat of Substitution: High. This is because as there are a lot of competitors already in the market offering substitute products and offerings. To illustrate, those selling furniture’s made of Iron, Steel, Plastic, Carbon fiber, Air borne furniture’s etc. So it is getting much easier nowadays for the buyer to shift his/her choice. This in turn increases the threat of substitute products to the business of Brothers furniture. The underlying factors are: * Some cross product substitution * Buyers ability to