The 5 Force Analysis of

GOODSERVE BUSINESS
SOLUTIONS
 GROUP MEMBERS
Name Roll No.
• Abhishek Patil 085
• Abhishek Verma 105
• Ravi Prakash Singh 090
• Santosh Nair 084
• Vikrant Gole 075
Type of Industry

Our Industry
Shipping & Logistics
Our Competitive Strategy
• With a relatively established Middle east and Southeast market,
we would like ourselves to expand to Europe & US sectors.

• This will be done by focusing on existing clients who has

business to these sectors.

• Expanding our overseas agent base.

• Reverse selling as a mode of entry in a more competitive

market.
Bargaining Power of Buyers
Determinants Question Power of Reason
Buyers
Are the buyers fragmented or highly
Concentration concentrated (i.e., do a few monopolize
2 -Many
the market)? If they are few and buyers(clients)
concentrated, then buyer bargaining
power is typically high.
exists.
Does your product buyer’s purchase
Product Cost represent a significant fraction of the
4 - Logistics cost is
versus Total buyer’s costs? If so, buyer bargaining 10-15 % of total
power is typically high.
Purchases invoice value.
Is the buyer’s product or service a
Product commodity? Is branding critical for
3 - Product can vary
Differentiation success? Is there an actual versus a from raw materials
perceived difference? If the products are
standard or undifferentiated, buyers
to finished products
typically have high bargaining power.
Are switching costs low or high? If buyers
Switching face few switching costs, their bargaining
3 -Due to very low
Cost power is typically high. switching cost and
many no. of
providers
Bargaining Power of Buyers
Determinants Question Power of Reason
Buyers

Profits Do buyers earn low profits? If so, they are 4 -Due to low profit
typically more likely to bargain hard.
margin
Backward Can they make what you make 2 - High Cost and
themselves? Is there a threat of backward
Integration integration? If so, the threat is typically Coordination
high.

Impact on Is the product you offer important to the

1 -All shipments are
quality of the buyer’s products or services?
Quality/ If not, buyer power is typically high. transit sensitive.
Performance -Appropriate
documents required.

Does the buyer have complete information

Buyer on the product he may purchase? If so,
4 -Transparency in
Information buyer power is typically high. service and costing
Overall Threat Level Of Buyers
• Rating :- 4

• Threat: - High

Reasons
• Low entry barriers in export market has given rise
to new and cut through competition, resulting in proportionate
growth of logistic Industry.
• Entry of small players in logistics has invariably increased
bargaining power of buyers.
Example:- APAR INDUSTRIES, TATA MOTORS, CIPLA.
Bargaining Power of Suppliers
Determinants Question Power of Reason
Suppliers
Are your suppliers fragmented or highly
Concentration concentrated (i.e., do a few monopolize the
2 -Many Substitutes
market)? If an industry is dominated by a
few companies, the suppliers are typically
powerful.
Are there any substitutes for your
Presence of suppliers’
2 -Many options
Substitute products? If not, suppliers are typically available
powerful.
Inputs
Is your industry an important customer of
Importance the supplier group? If not, suppliers are
2 -Suppliers can
Relative to typically powerful. provide value
Customer addition
Ex: Ancillary Service
Is your supplier’s product essential to the
Impact on quality or performance of your business? If
3 -It is required to an
Quality/ so, suppliers are typically powerful. extent. Ex: Shipping
Performance line & NVOCC
Bargaining Power of Suppliers

Determinants Question Power of Reason

Suppliers

Is the supplier’s product or service a

Product commodity? Is branding critical for
2 -Numerous number
differentiation success? of options available
Is there an actual versus a perceived
difference? Suppliers with differentiated
amongst suppliers
products typically have more bargaining giving same
power than suppliers selling commodities.
services.
How costly is it for you to switch from the
Switching supplier’s product? If switching costs are
2 -Less Financial
Costs high, suppliers are typically more powerful. liability, hence low
cost
Can the supplier produce the product you
Forward make? Is there a threat of forward
5 -Very high in case of
Integration integration? If so, suppliers are typically NVOCC
powerful.
Overall Threat Level From Suppliers

• Rating :- 2

• Threat: - Low

Reasons
• Supplier’s service is available in abundance in most of logistic
component which makes it less threatening.
Example:- Bombay Ludhiana Road lines (BLR), Allcargo ,
Mearsk.
Threat from Rivals
Determinants Question Intensity Reason
of Rivalry

Industry How slowly or quickly is the industry 3 -Depends on

growing? If it is a slow growth industry,
Growth there is likely to be a more intense fight economic
among rivals for market share.
conditions.
Fixed Costs Does your business have high fixed costs? 4 -Not all verticals
If so, rivals will typically be tempted to cut
prices to ensure sales, thus posing a like transportation
significant threat.
and custom broking.
Intermittent How frequently is there a problem of excess 1 -Laborers or
capacity in your industry? Are there periods
Overcapacity when there is excess capacity? employees during
Overcapacity often leads to price cutting. If
so, there is typically a threat.
recession or at a
time of slow growth
business can
become a liability.
Product Is your product or service a commodity? 4 -CHA License.
Typically, the closer a product is to being a
Differentiation commodity, the fiercer the intensity of
rivalry.
Threat from Rivals
Determinants Question Intensity Reason
of Rivalry

Brand Identity Is branding critical for your rival’s success? 2 -Not very critical
Is there an actual versus a perceived
difference? Brand identification by buyers
reduces the threat of rivals.
How costly is it for your buyers to switch
Switching between providers? Low switching costs
5 -Very easy, lot of
Costs typically increase rivalry. When a customer alternatives
can freely switch from one product to
another, companies must struggle to
capture and retain customers.

Are there a large number of firms of equal

Concentration size and power, all chasing after the same
5 -Low exit and entry
and Balance customers? If so, rivalry is typically intense. barriers
Are there competitors with different
Diversity of strategies and frames of reference? When
4 -Innovative diversity
Competitors competitors are diverse, it’s more difficult to does not exists
establish the rules of the game, so the
threat from competitors is greater.
Threat from Rivals

Determinants Question Intensity Reason

of Rivalry

How high are the rivals’ corporate stakes?

Corporate What do rivals stand to lose (e.g., profits,
4 -Stakes are High.
Stakes decision-making power)? Strategic stakes -Providing high
are high when several firms in an industry
take great risks to expand, diversify, and
credit to penetrate
gain market position. The intensity and the market
volatility of the rivalry increases when firms
select alternative strategies that may
sacrifice short-term profitability.
Are exit barriers low or high? High exit
Exit Barriers barriers make it costly to abandon a
1 -Less Financial
product; for example, when an organization liability which
has specialized assets that cannot be easily
sold off.
enables companies
to wind up easily
Overall Threat Level From Rivals

• Rating :- 4

• Threat: - High

Reasons
• Movement of freight is mostly a high cost affair and relatively a
fixed cost.
• With considerably low barriers to entry & exist; competition can
easily under quote the freight component to get the business.
Example: UT Worldwide, Hindustan Cargo (a division of
Allcargo).
Threat from New Entrants
Determinants Question Threat of Reason
Entry
Does successful entry require that
Economies of companies have significant economies of
4 -Person should have
Scale and scale or experience? Barriers to entry are highly experienced to
typically high when an aspiring company
Experience must cut costs in order to compete in a
this industry
large-scale and/or experienced market.

Product Do new entrants need to differentiate by 1 -No product

spending heavily on advertising, customer
Differences service, or product differences to differentiation
overcome existing customer loyalty?
Product differentiation is typically a barrier
because of
to entry. similarity in
products
Brand Identity Do new companies need to spend heavily 1 -Branding is not a
on brand identification to gain customer
loyalty? Brand identification is typically a major factor for
barrier to entry.
business decisions in
logistics
Switching Does the buyer have to pay to switch from 1 -Availability of many
one supplier’s product to another? High
Costs switching costs are typically a barrier to substitutes
entry.
Threat from New Entrants
Determinants Question Threat of Reason
Entry
Does the new company need to invest
Capital large financial resources (relative to
1 -Can also start
Requirements market size) in order to compete? Huge business by putting a
capital requirements are typically a barrier
to entry.
sub-agency network
Do newcomers have access to
Access to distribution channels for products or
3 -Depends on the type
Distribution services? Difficult access can typically be of entry
a high barrier to entry.

Cost Established companies have cost 5 -As the experience

advantages over new rivals because they
Advantages may have already obtained proprietary and establish survive
product technology, access to raw
materials, favorable locations, and
not only on cost but
government subsidies. In addition, also on established
established companies may have passed a
learning or experience curve. Such cost
service
advantages are typically a barrier to entry
for new entrants.
Government policies, such as antitrust
Government regulations, can help to preserve or limit
1 -No stringent
Policy competition. Such policies can typically government policies
create a barrier to entry.
Threat from New Entrants

Determinants Question Threat of Reason

Entry

New entrants may decide not to enter a

Expected new market if existing firms are likely to
3 -Intense competition
Retaliation retaliate. Established firms may have a often results in
history of retaliating, resources to fight
back, a strong commitment to the
retaliation. But this
industry, and illiquid assets employed in completely depends
the industry. Also, if the industry is
growing slowly, they may retaliate against
on kind of business
new players who would threaten sales volumes an
growth.
established company
does.
Overall Threat Level From New Entrants

• Rating :- 4

• Threat: - High

Reasons
• Low entry barriers.
• Less capital investment.
• There is always a chance for a new entrant getting into the
market.
Threat Of Substitutes

Determinants Question Threat Reason

from
Substitutes
Price Does the substitute offer a better price or N/A -No Substitute for
performance? A substitute product or
Performance service is a threat to competition when it logistic activity.
offers a higher performance at a given price
or the same performance at a lower price.
Improved quality of
service can only be
the substitute.
Switching Is it costly for buyers to switch to the N/A -Same as above
substitute product or service? When buyers
Costs must pay more to switch to a substitute, the
threat of substitutes is low.
Overall Threat Level Of Substitutes
• Rating :- N/A

• Threat: - N/A

Reasons
• There can only be a quality substitution and not a product in
logistics. One can only try improving the quality.
• Example: If an exporter want to send a freight by Air to
Germany and his existing agent commits 3 days of transit time,
then this can be only substituted by someone offering lesser
transit by economising freight. This is the closest substitute
where lesser freight & low transit is offered at same time.
Structure of Complements
• GBS has many complements to offer in addition to our main
activity that is the “Freight Forwarding”.
• We always feel that complements offered, is a major leap
towards creating value addition and an opportunity to
increase economies of scale.

• That’s what signifies when we say

“Where consulting meets service”
 Our Complements
• Custom Clearance
• Transportation
• Warehousing
• Providing customized ancillary service at warehouse.
• Cross country shipments.
• Documentation & custom benefit consultancy.
THANK YOU !!