Group Discussion Week 4 Post#2 Group 5

Group Member

ZHANG Han; WANG Andi; LI Yuwei; YE Yijia; XIANG Lushan; CHEN Yijie

Porter's Five Forces Worksheet——Focus on Pinduoduo

1. Bargain power of Suppliers:

1. There are many suppliers

2. Their products and services are not that unique

3. Easy to switch at a low cost

2. Bargain power of Customers:

1. There are many customers

2. They have many choices

3. Their orders are big because of their unique purchasing mechanism and the huge demand from each customer

4. There is no cost for the customer to switch

5. Did not depend on a few customers

3. Threat of Substitution:

1. There are very few close substitutes, maybe 1688 can be one

2. The price of 1688 is lower compared to Pinduoduo

3. The quality of 1688 is in tie with Pinduoduo

4. The threat of new Entry:

1. The loyalty is low as buyers only choose depending on the price

2. The buyer can easily switch to a different APP

3. The entering requirement depends on the scale of business, from individual merchants to phenomenal giant companies.

4. The regulation of government depends on how serious the business is gonna be, but generally speaking it is getting more and more restricted

5. It is hard to gain access to the distribution channel as Pinduoduo is developed upon the cooperation with various popular media platform

6. It is rather easy for new staff to acquire the necessary skills to do the work

5. Existing Rivalry:

1. A few oligopolies such as Taobao and Jingdong exist in this industry

2. The size of competitors is giant

3. The competitors offer goods with better quality