STRATEGIC

GROUP 2 INTERNATIONAL
BUSINESS
MANAGEMENT

Member
s of
group

Ha Phuong
Thao
Doan Thuy
Duong
Ngo Thi Thu

Theor
y of
5

five forces
model

1. Rivalry among competing

firms
2. Potential entry of new
competitors
3. Potential development of
substitude products
4. Bargaining power of suppliers
5. Bargaining power of
consumers

3
step
Identify key aspects or
s
01 elements of each competitive
force that impact the firm.

02
03

Evaluate how strong and

important each element is for
the firm.
Decide whether the collective
strength of the elements is
worth the firm entering or

1. Rivalry Among Competing

Firms

Similar size of firms

competing
Falling demand for the
Similar capability of firms
industrys products
competing
When consumers can switch
Falling product/service prices in
brands easily
the industry
When barriers to entering the
When barriers to leaving the
market are low
market are high
When the product is
When fixed costs are high
perishable
among firms competing
When rivals have excess
When rivals have excess
inventory
capacity
When rivals sell similar
When customer demand is
products/services
falling
When mergers are common in the
industry
High number of competing firms

Condition High
rival

How to improve
firms
competive

lowering price
potision

enhancing
quality

adding

features

extending
warranties

increasing

2. Potential entry of new

competitors more
New
competior
s

enter the
industry

competitor
s

STRAT
EGY

Identify

Monito
r

Raise
barrier

3. Potential Development of
Substitute
The sameProducts
or similar
function as another
An attractive
product.
Threat
price of
of
Increased
substitutes
substi
quality of
Low
switching
tute
substitutes
costs to
and monitor
consumers
Solut Identify
the change of science
ion:
and technology

4. Bargaining power of
suppliers

The number of suppliers

The number of goods and
materials

The property
5. Bargaining
powerof
of good and
material
consumers
The number of buyers
The number of information that

5
forces
model

1. Rivalry Among Competing

Firms

Market share
others; 18%
TH true milk; 8%
vinamilk; 49%
friesland campina; 26%

2. Potential entry of new

competitors
7.5
%
Import

23
%
34
worl
d
%

3. Potential Development of
Substitute Products

4. Bargaining power of
suppliers

10
0%

milk from
farm

87
%

Additives
emport

5. Bargaining power of
consumers

35
0

Distribut
or
In Viet
Nam

170.0
Retail
00
strore

State company for

foodstuff trading,
baghdad
Abdulkarim alwan
foodstuff trading

SUGGESTIONS FOR
VINAMILK

Improve product and service quality

Do more market research

Design dairy farms that provide fresh

milk

Invest on technology to make

products
meet
international certification
Expand the distribution channels at

For you listening