Mobile computing has revolutionized the way we do business, shop and communicate. Let’s break down briefly how mobile computing has an effect on each of the Porter’s five forces. 1. Bargaining Power of Suppliers Mobile computing gives suppliers more bargaining power, especially with the integration of social networking. There is variation of services and personalization that is readily available with so much customer input. Considering supplier costs, development is either costly or it isn’t. If the application is extensive, supplier costs (or development costs) can be considerable.
The buying industry can hinder the supplying industry in development if buyers are demanding of a more extensive application (features, etc) or are reluctant to use an upgraded version of the service or application. This would influence the costs of development, and lower stance in terms of rivalry. 2. Bargaining Power of Customers As there are many options and avenues for buying online, customers have a lot of buying power in the mobile world. They can rate a product, service or application quickly and share their reviews with virtually anyone.
Because there is a great deal of competition, buyers have an upper hand in naming a price. Additionally, there are many avenues to shop or use a service on ther internet, and switching to an alternative site, brand or provider of a service is relatively easy to do. If a buyer does not like the eBay application for instance, they can switch to the Amazon application and test its ability to bring them what they want and need. 3. Threat of New Entrants Competition is high when it comes to mobile applications and sites. If there is a scarcity of experienced staff to develop, this can become a threat to the business.
Customers also, for the most part are very fickle, and there are a lot of factors that play into a person’s loyalty to a brand, let alone more factors when dealing with ease of use of a business’s site or application. There are always existing or upcoming competitors in the mobile world, and they are even more of a threat when they coax competition’s customers with an easier-to-use platform. 4. Threats of Substitutes There are obviously threats of new entrants in the mobile world. Accessibility and ease of use and value are huge factors in a website or application, and as mentioned before, customers are fickle.
If they can get it cheaper and faster elsewhere, then business is taken elsewhere, at very little to no inconvenience for the customer. Trends are also a big factor, and not staying fresh and up-to-date will cost a business. 5. Competitive Rivalry between Existing Players There are big players in the mobile world, many of which have similar strategies or offers/services. For instance, travel sites such as Expedia, Hotwire, Priceline and Orbitz offer similar services and/or products. This means there is a lot of price competition.