Five Porter Forces
- Bargaining power of buyers
If you have a small number of customers, the bargaining power is high and the customers will call for lower prices and better conditions due to the low product demand putting the company in troubles, it is for these reason that the negotiation power of customers should be minimized, and this is achieved increasing the number of customers or gaining product loyalty.
Because the main customer of the project is the state, the bargaining power is strong and essentially the implementation or development of the project depends on this. Since increasing the number of clients isn’t feasible, the need to emphasize the benefits that it brings to the state (Public spaces free from canine feces, biogas, bioferlitizers and after sale services), highlighting the project as a product for solve a health problem and thus allowing loyalty and investment in the biodigester.
- Industry rivalry
Because there are no companies in abundance that offers this product, the rivalry power is slight giving the impression that the sector to which the product is guided is profitable. If the new entrants and substitutes threats is controlled this profitability will remain.
- Threat of new entrants Amenaza de los nuevos entrante.
In order to prevent the entry of new companies that offer a similar product and reduce this threat, six possible barriers or obstacles are introduced in the market, of which three can be implemented so far in the project: Distribution channels, capital injection and product differentiation.
Because it’s a public nature product focused primarily in the state, we would have means and distribution channels to potentiate and differentiate the product.
- Bargaining power of suppliers
Because they are new products and are not recognized by suppliers, they will not provide payment facilities, a strategy that is attractive enough to obtain resources is needed. First government support is sought, showing the benefits of implementing the project, so that the economic resources and raw materials for manufacturing can be obtained. As an auxiliary plan we will opt for financing of private companies focused on environmental protection, capturing them with the sub-products generated by the project (Methane gas and biofertilizer) which can be commercialized.
- Threat of substitutes
Despite being a new and innovative product, there are others that can replace the biodigester such as the trash bags, mugs and other collection systems, however, our product offers several benefits such as cleaning the park, biogas and biofertilizer generation due to the adequate treatment of the canine solid residues. The biogas generated can be used in various ways such as: Electric power generation, heating, cooking, among others. The bioferlitizer produced by the biodigester contains high levels of potassium so it can be used to enrich soils lacking in nutrients. With the canine feces treatment provided by our product, we obtain useful profits and reduce the costs of transport to landfills which other collection systems do not.