Angel Lou Bueta

Case 1

Strategic Analysis for Cable Industry

Porter’s Five Forces Model

Threats of New Entrants

Factors to consider are entry barriers, product differences, brand value, capital
requirements, access to sales, absolute cost benefits, learning curve benefits, and
government guidelines.

How to deal with the threats posed by the newcomers in the cable industry.

• As new products and services are developed, new entrants pose a threat. New
items not only attract new customers, but also give existing customers an
incentive to continue purchasing products from a cable company.
• Invest in Research and Development and Develop Skills Newcomers are less
likely to enter a dynamic business where incumbents regularly set standards.
Dramatically reduces the window of opportunity for new businesses to make
spectacular profits and discourages newcomers to the field.
• By achieving economies of scale, the fixed cost per unit can be reduced.

Bargaining power of Suppliers

Almost all companies in the industrial equipment and components industry obtain their
raw materials from numerous suppliers. Dominant suppliers can lower the margins that General
Cable Corporation can achieve in the market. The overall effect of increased bargaining power
with suppliers are that it reduces the overall profitability of industrial equipment and
components.

How can a Cable Industry deal with Supplier Bargaining Power?

• Build an efficient supply chain with multiple suppliers.

• Experimenting with product designs using different materials so that as the price
of one commodity increases, the company can switch to another.
• Create dedicated vendors who depend on business for a living.

Bargaining Power of Buyers

Buyers tend to be picky. They want to buy the best deals available by paying the lowest
possible price. This has a long-term negative impact on the profitability of General Cable
Corporation. The bargaining power of customers and their ability to look for bigger discounts
and offers.

How can a Cable Industry deal with buyer bargaining power?

• Build a large base of customers because it will help by reducing the bargaining
power of buyers and will provide and an opportunity to the firm to streamline its
sales and production process
• By hastily innovating new merchandise. Customers frequently searching for
reductions and services on mounted merchandise so if General Cable
Corporation hold on arising with new merchandise, then it is able to restriction
the bargaining energy of buyers.
• The new products will also reduce the churn of existing General Cable
Corporation customers to its competitors.

The Threats of Substitute Products

When a brand-new products or services meets a comparable purchaser wishes in

distinctive ways, enterprise profitability suffers. The hazard of a replacement products or
services is excessive if it gives a cost proposition this is uniquely distinctive from gift services of
the enterprise.

How can a Cable Industry deal with the problem of substitute products and services?

• By being service-oriented and not just product-oriented.

• By understanding the core need of the customer rather than what the customer is
buying.
• Increase in change costs for customers.

Rivalry Among Existing Competitors

If the contention most of the present gamers in an enterprise is severe then it'll pressure
down charges and reduce the general profitability of the enterprise. General Cable Corporation
operates in a completely aggressive Industrial Equipment & Components enterprise. This
opposition does take toll on the general long-time profitability of the organization.

How can a Cable Industry deal with intense competition in the Industrial Equipment &
Components industry?

• By building a sustainable differentiation

• By building scale so that it can compete better
• Work with the competition to grow the market instead of competing for a small
market.