5 COMPETITIVE FORCES

Competitive forces of Proton can be explained using The Porter’s Five Forces.This

forces clearly shows that the competitive environment is not only about the

competitors itself. It can be about the economic decline, natural misfortunes and so on.

Porter Five Forces

1. Competitive Rivalry

2. Threat of New Entrant

3. Threat of Substitutes

4. Buyer Power

5. Supplier Power

Industry Rivalry - After PERODUA that is main competitor for proton , there is not too much

competitor around affordable car. The low cost car as mentioned above is not have a lot of

competitor in generally. The affordable car in Malaysia has a more potential to sell compared

to luxury car that only specific people are used it.

Threat of Substitutes – Malaysia has two national car,Proton and Perdoua .The substitutes

will high in term of car model and some of them looks similar.Customers also can use public

transportation and other means of transportation to substitute with PROTON such as GrabCar

which are conveniently available.

Threat of New Entrants – Recession the economic will be a big threat for PROTON. All big

company will facing over budget or does not achieve the sale for that year. The government

will lose a lot of money cause of policy and shareholders.Moreover,economic downward

tendency actually comes suddenly without notice.

Bargaining power of Buyers - Car buyers have high bargaining powers because they

have many choices in the market (similar product with similar price range) and

substitutes. Buyer will choose the cheap car for the first car and buyer also actually are

fragmented. Therefore,it will not has much influence.

Bargaining power of Suppliers - Local spare parts suppliers used to be powerful with

PROTON last time, but now with Geely’s partnership, PROTON has an alternative option

to source cheaper spare parts from China.