Posted: November 29th, 2013
Entrepreneurship (Venture Development)
Entrepreneurship (Venture Development)
Porters Five Forces
Porter’s five forces external to the business include threat of new entrants, supplier power, buyer power, threat of substitutes, and rivalry among competitors. Each of this five forces relating to the venture development is addressed below in this paper.
Threat of New Entrants
The venture development is developing a new product in the market. It aims at providing medical practitioners with an alternative to treatment and prevention of ACL injuries especially in Australia where they are at highest. Thus, threat of new entrants is not yet established. However, success of the product could trigger other entrants to venture in the business. Considering the product is electrical, cost of entrance would be easy for other entrants. Therefore, threat of new entrants will be dependent on the success of the new product under development.
The product makes use of aluminium and thermoplastic elastomers, which are readily available. Thus, there are many suppliers to choose. More so, the product can use multiple resources that are readily available, making it easy for access and lowering bargaining power of the suppliers. Other materials needed are electronics, which are also readily available from many suppliers. Additionally, there are low switching costs, making it easy for the venture to change suppliers without incurring losses. Thus, supplier power is low.
Buyer/ Customer Power
Currently, the product is new, making the number of sellers few, while there are more buyers. Therefore, customers or other buyers may not have an alternative provider of the product. However, there has to be a need for purchasing the product. The product is supposed to be an alternative to invasive methods of treatment for ACL injuries. Thus, practitioners have to realize its need in order to purchase. This requires weighing the advantages and disadvantages of the product to their work.
Threat of Substitute
Within the purpose that the product is supposed to serve, other alternative measures for serving the same purpose exist. Therefore, substitutes to the product exist. Within the current method, many improvements have been made to make them more non-invasive, increase accuracy, and among other improvements. Thus, the product faces several substitutes since it seeks to serve a need that is already served by other existing methods only that it seeks to serve the same in a different way.
Rivalry among Existing Competitors
Within this industry, the competitor rivalry is based on the need for having data of researching on the new measures. Early entrance in the market is another determinant in the competitive rivalry. Competitors entering new markets early have a better competitive chance than newer entrants do do. This helps in establishing an early position within the market for the company, and gaining a market share, which is easy for new products before other entrants. There is no price competition within this market.
Competitors within this industry include direct and indirect ones. The competitors include measures of feel by the practitioners. Some of the practitioners will prefer using their usual methods. Some of the current methods posing competition include internal measuring of the tibial rotation as well as data analysis, which collected during surgery upon consent of patients who give their permission. Competition exists within the methods used for treating the anterior cruciate ligament injuries. Some gadgets posing the competition include the electrogoniometer for invasive procedures, pin sensors measuring and internal tibial rotation. The other one is the rotometer used for pin mechanism and visual reading, and the KT-1000 Arthrometer for readings from a dial A-P translation. This provides competition to the product both direct and indirectly.
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