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    Threat of Substitute and Bargaining Power of Suppliers

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    george
    The threat of substitutes for Megaworld Corporation is at a medium level. While there are numerous substitute real estate properties available that could enable buyers to negotiate better terms or switch to cheaper options, Megaworld still maintains some competitive advantages over its competitors. However, the presence of lower-priced substitutes and low switching costs for consumers poses a threat that cannot be underestimated. The bargaining power of suppliers for Megaworld is low, as the company has a broad base of suppliers to choose from and is therefore able to dictate pricing and terms during the bidding process.

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    Threat of Substitute and Bargaining Power of Suppliers

    Uploaded by

    george
    120 views2 pages
    The threat of substitutes for Megaworld Corporation is at a medium level. While there are numerous substitute real estate properties available that could enable buyers to negotiate better terms or switch to cheaper options, Megaworld still maintains some competitive advantages over its competitors. However, the presence of lower-priced substitutes and low switching costs for consumers poses a threat that cannot be underestimated. The bargaining power of suppliers for Megaworld is low, as the company has a broad base of suppliers to choose from and is therefore able to dictate pricing and terms during the bidding process.

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    The threat of substitutes for Megaworld Corporation is at a medium level. While there are numerous substitute real estate properties available that could enable buyers to negotiate better terms or switch to cheaper options, Megaworld still maintains some competitive advantages over its competitors. However, the presence of lower-priced substitutes and low switching costs for consumers poses a threat that cannot be underestimated. The bargaining power of suppliers for Megaworld is low, as the company has a broad base of suppliers to choose from and is therefore able to dictate pricing and terms during the bidding process.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    120 views2 pages

    Threat of Substitute and Bargaining Power of Suppliers

    Uploaded by

    george
    The threat of substitutes for Megaworld Corporation is at a medium level. While there are numerous substitute real estate properties available that could enable buyers to negotiate better terms or switch to cheaper options, Megaworld still maintains some competitive advantages over its competitors. However, the presence of lower-priced substitutes and low switching costs for consumers poses a threat that cannot be underestimated. The bargaining power of suppliers for Megaworld is low, as the company has a broad base of suppliers to choose from and is therefore able to dictate pricing and terms during the bidding process.

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    Threat of Substitute

    Threat Level: Medium

    Consumers buying power is a major factor when it comes to business performance.


    This element of the five forces focuses on consumer demands and sensitiveness
    towards the product. The following are the external factors to be considered to assess
    and measure the presence of the threat:

    • Number of Consumer

    • Consumer Sensitivity

    • Switching Costs

    “Switching costs” and “Consumer sensitivity”, switching costs is a significant threat to be


    considered, considering the number of substitute products available in the market, it
    enables the potential buyers to seek other realty and somehow be able to negotiate for
    the terms that will benefit them more, moreover some competitors have priced their real
    estate inferior to Megaworld, meaning that consumers who tend to be more price
    sensitive would consider switching preferences. In this kind of situation, the pressure
    will increase for the company and will be favorable for the buyer. If the substitute prices
    are lower than the company and the switching cost is low, threat of substitute will
    remain to be a factor in the external environment of the company. Threat level is at
    medium level because the company is still in a more competitive and challenging
    environment. This threat can not be underestimated but also cannot be considered at
    high, since Megaworld maintain to have a competitive advantage towards its
    competitors.
    Bargaining Power of Suppliers

    Threat Level: Low

    Normally, suppliers have their control in a business when there is only few of them who
    offers the resources needed by a company. They will be the one to dictate the price and
    the content of a contract since the company has no other option but to transact with
    them.

    As for Megaworld Corporation, they have the luxury and the privilege to choose a
    supplier since one of their strengths is having a broad base of suppliers. With their
    handful list of suppliers, they can be the one to dictate the phase of the bidding since
    there will be a lot to choose from. It will be more beneficial for them because of the high
    possibility that they will have an offer that much lower and cheaper than the market.
    Having that said, it is safe to say that Megaworld has a low threat level for the
    bargaining power of supplier.

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