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Five Forces Model Analysis.

Porter's Five Forces Model Analysis was proposed by Michael Porter in the early 80's for the analysis of competitive strategy, which can effectively analyze the competitive environment of customers.

The Five Forces model identifies the five main types of competition, namely, bargaining power, bargaining power of buyers, threat of potential entrants, threat of substitutes, and competition between firms in the same industry as shown in the figure below

Five forces that affect industrial competition.

Five Forces Analysis. Threat of potential entrants: It may be a new venture or a former business in another industry with a diversification strategy, where potential entrants bring new production capacity and demand a certain market share.

Competition among existing enterprises: Competition between existing enterprises refers to the competition relationship and degree between various enterprises in the industry.

Five Forces Analysis. Bargaining power of suppliers: Suppliers often exert pressure on downstream enterprises in the industrial chain by raising or reducing quality and service, so as to squeeze as much industrial profits as possible.

The bargaining power of the buyer: the buyer (customer, user) is always to lower the quality of the product and improve the level of service and bargaining with the enterprises in the industry, so that the enterprises in the industry compete with each other, resulting in a decline in industrial profits.

Threat of substitution: Substitution refers to those products that have the same or similar functionality as the company's products.

Analysis of the five forces competition in the furniture industry.

First, the existing competition within the industry from the perspective of the industrial development cycle, with the rapid development of China's furniture industry for more than ten years, the furniture industry has been in the early stage of the growth period, which is characterized by the furniture industry has formed a certain industrial pattern, with a certain scale, but the overall level is still relatively low, the scale of enterprises is generally small, the industrial pattern is still unstable, furniture production is in a large range of adjustment, but the development speed of the industry is relatively rapid, there is a huge space for development From the perspective of industrial market structure, China's furniture manufacturers are generally small and medium-sized enterprises, the market concentration is very low, and a few large furniture manufacturers have begun to homogenize the production area of furniture owners in terms of processing technology and product categories; There are few well-known brand enterprises and many low-end products; The design and development capabilities are generally weak, and the marketing level is low; The export of furniture products is highly concentrated in the region, and at present, the cost advantage also has a certain competitive advantage in the international market.

** Bargaining power of the quotient.

The bargaining power of the purchaser.

The threat of new entrants.

The threat of substitutes.

The degree of competition among competitors in the same industry.