Five Force Analysis
The nature and degree of competition in an industry hinges on Five Forces.
1. Threat of New Entrant: Intuit has created a product differentiation advantage through its exceptional customer service and created high brand image through most effective marketing tools that resulted in 8 out of 10 customers buy its product through word of mouth. Also there are few more companies like H&R Block and The Saga Group. So it becomes really difficult for new company to enter and compete in the market.
2. bargaining power of Buyers: Since there are more than one player in the market and competition has given them more choices and competitive prices. Hence, it increases the bargaining power of the buyers.
3. Bargaining Power of Suppliers: There are number of suppliers supplying compact discs and there is huge competition in the market. So suppliers do not have any bargaining power in this case.
4. Threats for Substitutes Product: There is no substitute available in the markets for financial management, tax preparation software programs other than hiring specialized personals in the field which is quiet expensive way of doing so therefore providing no threat to the industry.
5. The Intensity of Rivalry: There is a huge competition in the industry. Though Microsoft discontinued its Microsoft money but there are still many players which are providing solutions for mobile devices which Intuit is not and that too at comparable prices.
The Essay on Monopoly Power In The Computer Industry
Monopoly Power in the Computer Industry A requirement for pure competition is the absence of significant barriers to entry into the market by new firms. Monopoly, correspondingly, arises because of barriers to entry. A monopoly firm is the only seller of a good or service with no close substitutes. The market in which the monopoly firm operates is called a monopoly market. The definition of a ...
Potential Entry Methods for Intuit
There are few methods that Intuit can adopt to enter into new markets depending upon various factors like amount of capital investment, sharing technology and risk taking ability.
1. Acquisition: This is quick and the fastest way to enter into new market. By acquiring some firm it will get already developed customers base and have access to acquired firm’s distribution network as well. Also by using its own i.e. Intuit’s core competences and brand image it can easily capture high market share in particular country.
2. Licensing: For the countries with high political risks and trade restrictions it can go this option because it doesn’t require Intuit to make large capital investment and retain established markets where it can’t reach otherwise.
3. Joint Venture: The countries where there is a limit on the foreign investment it can go for joint venture with other firms. It will help in sharing financial risks and offer Intuit the opportunity to move into new and non-core areas as well as provides access to other firm’s technology and skill set.
