Neger's Five Forces

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The analyst uses conclusions derived from the analysis to determine the company’s risk from in its industry (current or potential). The five forces are a. Threat of new entrants i. Entry barriers are high for online payment and transfer services even though there is an increasing amount of online payment and transfer channels in the market. The main thread would be the product differentiation, existing plays have brand identification and customer loyalties, hence as a new entrant of e-business, digital marketing spending is an essential to promote the business. ii. The business of payment and transfer was provided only by the banking institutions. The industry of payment and transfer is growing rapidly and experience an exponential growth…show more content…
Technology protection especially high-tech security, comply with consumer act is an essential running payment and transfer service online, security channel like SSL encryption protection or authentication is required. iv. Capital requirements could be a concern for online business even the start-up costs would be lower than a physical financial institution, e.g. Website, application for payment and transfer services, security protection on the online distribution channels, digital marketing, etc. v. Cost disadvantages compare to the incumbent as they may have cost advantages that can’t be copied which including the proprietary technology within the online platform and its experience. vi. Government regulation and policy especially Bank Negara Malaysia’s compliance policy that limits entry to the online payment and transfer services, e.g. licensing requirement to run the money service business in such a highly regulate industry. b. Threat of substitution i. The substitution for this business as compare to the banking institution, the threat of substitutes is medium since it is not easy to obtain licensing to become money business…show more content…
To supply a simple and intelligent tool that help to boost conversions and capture more customers to leverage on the supply platform for payment and services. v. Backward integration to be implemented to control over its suppliers so to increase the market power and to gain ownership over of supplier. vi. Implementing of backward integration strategy to realize economies of scale and gain market share by selecting suppliers with good reputation. In this case MGI a trust transfer provider that makes e-business more competitive. e. Competitive rivalry i. The e-business needs to improve on product and service differentiation by putting in enhance features for customer choices, simplify the process of services for non-literate tech-consumer so to improve the brand identification and increase high levels of product differentiation. ii. Be more creativity in the channel of distribution via vertical integration, e.g. partnership with different suppliers to cornered the low and mid-price services for customer’s choices. iii. Exploiting relationship with suppliers by requesting suppliers to maintain high-quality standard in their services to meet its demands for the product and service specification. iv. Ability in switching cost by raising or lowering charges fee to gain a temporary

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