Car Rentals - Five Forces Analysis

Car Rentals - Five Forces Analysis

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Intensity of Existing Rivalry

Bargaining Power of Suppliers

High competition among suppliers (Car Rentals) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Low cost of switching suppliers (Car Rentals) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Volume is critical to suppliers (Car Rentals) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...

Threat of Substitutes

Substitute has lower performance (Car Rentals) A lower performance product means a customer is less likely to switch from Car Rentals to another...
Substitute product is inferior (Car Rentals) An inferior product means a customer is less likely to switch from Car Rentals to another product or...
High cost of switching to substitutes (Car Rentals) Limited number of substitutes means that customers cannot easily switch to other products or...
Limited number of substitutes (Car Rentals) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Limited buyer information availability (Car Rentals) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Product is important to customer (Car Rentals) When customers cherish particular products they end up paying more for that one product. This...
Large number of customers (Car Rentals) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

Strong distribution network required (Car Rentals) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High capital requirements (Car Rentals) High capital requirements mean a company must spend a lot of money in order to compete in the...
Industry requires economies of scale (Car Rentals) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
High learning curve (Car Rentals) When the learning curve is high, new competitors must spend time and money studying the market...
Entry barriers are high (Car Rentals) When barriers are high, it is more difficult for new competitors to enter the market. High entry...

What is Porter's Five Forces Analysis?

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