Rivalry among existing firms – Many organizations belonging to the same industry treat their competitors as rivals. This is so because organizations in the same industry competes each other for various factors which includes resources, customer base, and other associated factors which supports their business operation to gain competitive advantage.
Bargaining power of suppliers – during high level of competition suppliers have numerous options for their customers which empowers them with capability to negotiate with their customer organizations on the cost of resources.
Bargaining power of consumers – due to increase in number of companies offering same product the consumers gain power to negotiate the price of the product since they have numerous options of companies offering the same product at different prices.
Potential development of substitute products – when a new product is launched in the market as a substitute of available products the competition level raises for the latter case (David, 2006, p.92).
FedEx Corporation is involved with the logistic services and serves a vast area across the globe with strong logistics capabilities. In the context of the company Porter’s five forces model has several relevant points which the company has considered to meet the challenges of high competitive force posed by its competitors. The company since its inception has significantly performed strategic analysis to remain ahead of its competitors by identifying different crucial aspects of the business and industry requirements. Since the company is fully involved in transferring of goods from one place to another, the threat of new product as its substitute is low. To reduce the threat of high competition from its rival organizations FedEx has continually strengthened its core business requirement, i.e. logistics system to gain customers’ trust. The company faced the threat from the Postal Department in U.S. when people started availing their ...
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