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What industry and competitive considerations are most relevant for the
growing, dominated by a few giant companies, and hard to entry. The industry
environment can be subdivided into five factors that make up the five forces model of
competition. The five forces are the threat of entry, the power of suppliers, the power
Threat of entry
It is very hard to develop a popular and reliable social media brand similar to
Facebook’s, and Facebook’s user base is too huge for newcomer to compete with, so I
think the threat of entry force is weak for Facebook to take into consideration.
Power of suppliers
equipment, office supplies, and network providers. There are many alternatives choice
Power of buyers
have strong bargaining power because there are many alternatives, both in social
media industry and traditional media industry, for them to buy advertisement, like
YouTube, Twitter, TV, radio, newspaper, etc. The power of buyers is a very strong
force against Facebook, so it is one of the most relevant considerations for Facebook’s
strategic planning purposes
Product substitutes
There are a few other very popular social media platforms available in the
market, such as Twitter, LinkedIn, YouTube, Tik Tok, that can provide entertainment,
force of product substitutes is also very strong, so it is one of the most relevant
The users of different social media are not exclusive, and many users used
different social media at same time. The number of competitors in this industry is also
limited to a few giant technology companies, so I think the intensity of rivalry among
Based on the analysis above, I think substitutes and costumers are the most
dominant influence on the firm’s strategic actions? In what ways (if any) should
The global PC market have been slowly declining for many years. As a company
the overall PC market. The declining PC market will have a dominant influence on
The E-sports, or competitive video game, industry is booming for the last ten
years, which lead to higher demand for gaming equipment and products. Logitech
created a sub-brand Logitech G for its gaming products and invested a lot of money in
sponsoring professional E-sports teams and events. Logitech’s actions bring it a very
good reputation among gamers. The growth of E-sports industry will have a positive
influence on Logitech.
3. Potential of VR equipment
VR, which stands for virtual reality, is the next frontier for the entertainment
industry. It will change the way we interact with digital world, and it is also
revolutionary for the entire computer peripheral industry. Some big companies like
Sony, Facebook, HTC and Valve are already developing their own VR equipment. If
Logitech is left behind in this area, its business may face destructive damage in the
future.
China trade war may have significant influence on its business in the U.S. Logitech
will need to consider moving part of its manufacturing to other countries to avoid