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Porter 'S 5 Forces 1 Threat of New Entrants
Porter 'S 5 Forces 1 Threat of New Entrants
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Threat of new entrants
How easy or difficult is it for new players to enter the market &
What barriers exist for new entrants?
For LIC the major competitors started coming after the year 2000
major companies among them are ICICI Prudential, Kotak
Mahindra & Birla Life Insurance. When they entered the insurance
sector, it was monopolised by LIC and hence it has remain a major
challenge for most of the private players. Collectively new entrants
have remained a low threat to LIC
THREAT: LOW
Threat of substitutes
All other firms provide similar product to the customers and hence
creating almost similar value for them and in some cases even
better service than LIC, the only advantage that LIC has over
others is the perception of authenticity.
THREAT: HIGH
How strong is the position of suppliers & are there a few suppliers
to choose from or many?
Since the major model of LIC is based on its suppliers that is its
agents, they have a much higher bargaining power than at other
institutes. Although LIC has been successfully satisfying them for a
long time by building a family like relations with them, it is quite
probable that other players might use LICs own suppliers against
it- By providing better commission rates,etc.
THREAT: HIGH
THREAT: HIGH
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