The threat of substitute products:
In everyday life a business will face many treats and scares. With these to take into consideration a company has to be built to face these factors. A treat that a company like DFS could face is Substitute Products. DFS need to maintain a high standard of products and services if they are not to lose trade to other companies like Homebase or Harvey’s. Customers could find better furniture products at the other competing stores at better prices and therefore lose existing customers. DFS will have to reduce prices and provide high quality products if they are to stay in competition with the other business’s.
The threat of the entry of new competitors:
Over a number of years a company starts to become acknowledged and the customer status begins to grow. The reason for this growth in customers is because these customers stay loyal and spread the word to other customers. When a company has a large customer rating then it is well established. However, overtime new companies begin to develop and start to affect the other company in that field of business. This will take away from the profit the existing companies have.
New companies put out a great advertisement for their products and this leaves that customers will be attracted and therefore will try out these new companies. DFS is in competition every day with new competitors and other existing competitors because their field of business is very popular.
The intensity of competitive rivalry:
In today’s market the product which is the cheapest and of the highest standard will always take preference. Business names mean nothing anymore and the bigger companies are finding more and more competition every day from the lesser companies. DFS has continually a half-price sale on which seems to never end as they are trying to keep their status up there with the bigger companies. Another factor which keeps DFS a good furniture dealer is that they provide great quality products and deliver them to your door without making the customer make any effort. They perform these duties cheap and efficiently which helps keep their customer ratings high and keeps them stable in the market.
The bargaining power of customers:
Customers have so much power when it comes to buying furniture. Furniture is such a big section in the market as so many people buy new products daily to enhance the look of their home. So if the customers find that they can get the product cheaper somewhere other than DFS then they will not fail to go to that store and purchase that product. Because of the furniture market being so big, DFS is at risk regularly on losing customers. In order for DFS to keep their customers they have to keep their prices competitive. If DFS was a company who had no competitors then they could rise their price range because they would know the customers would buy as they would have no other company to turn to for cheaper products.
The bargaining power of suppliers:
Supplier’s power can be high or low compared to the sort of market they are supplying. If there is a high demand for the use of a certain supplier because they are to the only one to supply certain products then they can charge companies whatever they like and the company would not take their custom elsewhere. But if there are a lot of suppliers they would have to fight among themselves to receive the most companies and keep their prices low. DFS could have a few suppliers so the supplier they have must keep their prices reasonable so that DFS will not change.
