Porters five forces

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Porters five forces model is an analysis tool that uses five forces to determine the profitability of an
industry and shape a firms competitive strategy. It is a framework that classifies and analyzes the most important
forces affecting the intensity of competition in an industry and its profitability level.

Porter Five Forces Model

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Bargaining Power of Buyer

Bargaining Power of Supplier (Vital & Small Supplier)
Threat of New Entrant
Threat of Substitute Products
Rivalry among Established Firms

1. Threat of New entrants

The threat of new entrants is high, because in-car infotainment remote
control industry is not very mature and has not successfully reached
economies of scale. Zumi product may easily be imitated by other new
competitors.
a. Take the Qantas A380 AVOD system which is manufactured by
Panasonic Avionics for example, this remote control system was
designed in 2008 by massive. It has been used in aircraft. But this
AVOD system is only used in an aircraft, so if this entrant want to enter
the in-car infotainment remote control industry, it need to spend a lot
of time, because of the existence of barriers to entry.

b. Customer loyalty: Panasonic owns a high recognition which is

extensive approbated by customers(branding identity).
2. Threat of substitute product
The threat of substitute product is not very high. There are not many
substitute products for Zumi in the market. There is no direct substitute
product and the number of indirect substitute is just 3-4 which including
Apple Remote and Microsoft Kinect etc.
A. Buyer propensity to substitute
a. Apple remote has only 4 directional buttons. This remote is for
controlling Mac applications, ipad Hi-Fi, Apple TV and some third party
accessories.
b. Microsoft Kinect: it is a mass market gesture remote, by using
gestures the users are able to cycle through menus, play simple video
games etc.
The Apple and Microsoft is extensive recognized by customers compare to
Zumi which is a new brand, customers may be choose to use Apple or
Microsoft rather than some other products.
B. Relative price performance of substitute
a. Microsoft Kinect: 157
b. Apple Remote: 15
C. Number of substitute products available in the market: 3-4 products,
including the current product which is manufactured on mass by Gemstar
Technology Co Ltd. In Guangdong, China; Apple remote, Microsoft Kinect
and the Avod system on airliners.
3. Bargaining power of suppliers
The bargaining power of suppliers for Zumi product is low. The key
elements of the materials for producing a Zumi product are PCB (Printed
Circuit Board) and plastic resin. There are so many manufacturers can
produce these materials. Zumi Company can easily switch to another
supplier if it is necessary.
4. Competitive Rivalry
In an industry the competition between existing firm is how to get the new
customers.Intensity of competitive rivalry is low. Zumi is all-in-one remote car
control which is easy to control without any instruction book for everyone.
Especially, there is no language or culture barriers because of its sample
design. By contrast, there are some manufactures provide the car remote
such as Sony, Rosen. But they cannot satisfy customers to control all in-car
media with one remote. In the other word, they will not offer equally attractive
products and services, and then we'll most likely have big power in the
situation, because suppliers and buyers will get a good deal from us.
However, we are new brand for this area; we do not have prior experience in
the market.
No direct competitors just some indirect competitors
Low customer loyalty
High barriers to enter because our technology and design are
advanced and low costs
5. Bargaining power of buyer
Buyers have the power to demand lower price or higher product quality
from industry producers when their bargaining power is strong. According
to the analysis on target which is families or young people who do not
have enough economic power which led to an organization power to
capture the profitability value will high or increase. However, Zumi remote
control is not similar with other products and price is lower than

competitors. On the other hand, bargaining power of buyer will get low
through there is some differentiation.
1. Apple remote for all Mac video Devices 15
2. Pioneer infra-red remote control for Pioneer Stereos 15
3. Sony RM-X174 remote commander IR remote 22
4. Satechi BT remote Bluetooth Multi-media remote control for Mac video
Devices 25.5
5. Rosen AC3205 in car DVD remote control 34.49
6. Microsoft Kinect: 157 (it is a mass market gesture remote, by using
gestures the users are able to cycle through menus, play simple video
games etc)
All these products above just can control devices which made by own
companies, but Zumi is ALL-IN-ONE remote control which matches with
any in-car entertainment devices.