Benjy’s Business Case Study

Benjy’s Business case study

Sumeet Aggarwal: 38451

1. Analyze the state of Benjy’s business using Porters 5 forces.

Rivalry among Players:

There are many firms of different sizes competing in this industry environment.

• Large number of Brick and Mortars electronic firms in the retail market
• Large number of Online firms in the retail market
• High aggressiveness of electronic retail firms to get the market share.
• Great pressure on Profitability.
• Higher Marketing Cost.

Potential New Entrants:

• New entry of retail firms is easily achieved even in the presence of giants like Benjy’s. Small retailers can enter the market and compete on the basis of convenience, location, specialty, and other factors. Similarly it’s not difficult to open online retail store.  
• It is costly to develop a new entrant’s brand. This condition exerts a moderate force on companies like Benjy’s.
• Already many players in a market fighting for a market share.

Potential Substitute:

Electronic Retail Business is about B2C business. That is selling electronic goods to consumers. So below can be potential Substitutes.

• Manufacturer starts selling directly to consumers.
• Local shops where consumers find something unique about the products and service.
• Selling products via other channels such as Online or via TV cable technologies (white space).

Bargaining Power of Suppliers:

• Suppliers have low bargaining power because retailers can easily switch to other brands with no extra cost and this fact reduces the bargaining power of suppliers.  
• There are additional important factors such as suppliers price sensitivity and comprehensiveness of information about features and functionalities of products that further decreases bargaining power of Suppliers.

Bargaining power of Buyers:

Buyers have high bargaining power because of range of options they have to buy same product from different Channels (Online, Brick & Mortar, local electronic shop).  

In Summary, Benjy’s must focus on Competitive rivalry and Bargaining power of buyers based on Porters 5 forces analysis.

1. Strong competitive rivalry or competition
2. Strong bargaining power of buyers
3. Weak bargaining power of suppliers
4. Weak threat of substitutes or substitution
5. Moderate threat of new entrants

1. Carry out a stakeholder analysis to judge if the strategy suggested by FARB (CEO) is a possibility.

Power / Interest Matrix

[pic 1]

CEO has high Power and Interest. Similarly all other board members also comes under High Power and High Interest. Suppliers have low power and low interest.

[pic 2]

As per above value net chart, Benjy’s can use telecommunication complementors business to make them partners and have mutual benefits and create value and different experience for customers. Hence It’s possible to implement strategy suggested by FARB.    

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