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Porter Analysis for the Paper Industry Essay Example

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Porter Analysis for the Paper Industry

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The intensity level of competition is determined through competitive forces which are prevalent in nature. The collective strengths of such forces usually determine the success of an organization functioning in the industry, which in turn would facilitate to gain greater profitability. Six forces framework consists of variables such as threats of new entrants, existing rivalry among firms, threat of substitute products or services, bargaining power of buyers and suppliers and lastly, comparative power of other stakeholders (Wheelen & Hunger, 2011).The bargaining power of buyers in the paper industry has enhanced quite rapidly with the concentration of various industries in the US such as food sector. In terms of the retailing viewpoint, the bargaining power has enhanced significantly from varied groups that are purchasing packaging material. This factor also has affected the roles played by varied parties inside the paper supply chain (Rundh, n. The bargaining power of buyers is generally high in the paper industry due to the availability of a variety of customers in the industry (Schindel, 2003).The bargaining power of suppliers has become relatively higher due to the arrival of advanced technologies in the paper industry. It can also be stated that pulp and paper industry has become increasingly demandable with the incorporation of technology as the major driving force in the paper industry. The aspect of product orientation has been another key driving force factor. Due to technological advancements, the demands for products also increased considerably as customers are seeking better quality products at much affordable rates. Moreover, with the structural alterations in the different networks on the part of the suppliers, the bargaining power has augmented by a greater extent from the supplying segment of technology (Rundh, n. The factors such as high cost as well as dependence upon crucial input elements obtained from the suppliers have rendered considerable challenges for the paper industry, consequently providing greater bargaining powers to suppliers (The Norman High School Tribune, 2013).A few of the competition with regard to paper as well as packaging industry is being generated from varied substitute products. There is healthy competition which is due to the emergence of substitute products. Distinctive solutions related to

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References

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