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Porters’s five forces
1. Introduction

Porter's Five ForcesThe turnover of e-commerce is still growing. German economic analysts expect a growth of another 10 percent for 2010 (Statista, 2009). Companies need to sell their products online in order to stay competitive. But in today´s online environment it is not only enough to offer their products on the internet, but also a well structured online shop which can be found in search engines. To realize this, companies need web designers and online marketers. There is still a lot of money involved but is it really worth going into this market? (Tedeschi, 2007) Read more…

 

Porters’s five forces
2. Porter’s five forces

2.1 Intensity of rivalry

In November 2009 there were more than 13 million .de-domains registered in Germany. In addition to that Germans also use .com- and .net-domains for their web pages. (Denic, 2009) All of these web pages are created by web designers who often have private intentions to put a profile of them in the internet but the majority have commercial intentions. There is an uncountable amount of agencies, self-employed or part-time web designers who all offer the same product for privates, small companies or whole enterprises just in Germany. There is still a growth of about 10 percent each year, so there is a constant entry of new competition into the market to cover the high demand of web pages. (Statista, 2009) Read more…

 

Porter’s five forces
3. Critical review of Porter’s five forces

The model of Porter’s 5 forces is suitable foranalysingan industry in general. You can get a good overview about the main factors of the external environment and with the aid of other strategic tools it can be helpful for making decisions concerning the entry in the business or for further expansion. But, like all economic tools, there are limitations. This model helps to simplify the view to this industry but every personal situation is too complex to analyse it with such a tool. There are always many other factors to take into consideration. If you combine this tool with other common external environment tools like PESTLE, Porter’s diamond, the I/R Grid, Yips’s drivers and the industry life cycle, you get a very detailed overview about the opportunities and the threats of an industry.

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Porter’s five forces
4. Conclusion

According to the model of Porter’s five forces it is worthwhile entering web design industry. Most of the forces are weak and even the strong ones are not impossible hurdles. In figure 3 you see an overview of Porter’s five forces in the web design industry and the changes that occur if the complexity of the web site increases. Read more…