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5 forces model-M.P-

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11204672

11202173

11203150

Lê Quỳnh Chi

Nguyễn Diệu Linh

Đinh Thị Minh Phương

11203639

11203677

11207329

11203829

Hoàng Thị Phương Thảo

Nguyễn Phương Thảo

Lê Minh Tú

Lại Anh Thư

Member

A. General theory of 5 Forces Model

B. Case study of Shopee in Vietnam

C. Reinventing 5 Forces Model

index

I. 5 Forces Model Overview II. 5 Forces Model framework III. Strengths and Weaknesses of 5 Forces Model IV. Comparison of the 5 Forces Model with other tools

General theory of 5 forces model

- Developed in 1979 by Michael E Porter of Harvard Business School - A simple framework for assessing and evaluating the competitive strength and position of a business organization - Used to identify areas of strength, to improve weaknesses and to avoid mistakes.

5 Forces Model Overview

I.

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II. 5 Forces Model framework

WEAKNESSES

STRENGTHS

1. Lack of Flexibility2. Assumptions3. Industry Specific4. Over Simplification of Industry Structure5. Focus on Short-term Strategies6. Not All Forces are Equal7. Assumptions of Perfect Information8. Does not Account for Changes

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vs

III. Strengths and Weaknesses of 5 Forces Model

1. Helps to Estimate the Competition in the Industry2. Showcase where the Strengths and Threats Exist3. Identify which Entities Holding the Power4. Display Opportunities to Expand the Business5. Assist to Understand the Corporate Risk6. Helpful in Making Corporate Strategy and Vision

• Five Forces Model is used for the company competitiveness threats analysis.

• Competitive advantages in the internal company are identified using elements of SWOT

• Barriers and advantages from nationals are analyzed by PESTLE

• Combine PESTLE, Five Forces Model and SWOT to formulate strategy

IV. Comparision of the 5 forces modelwith other tools

Overview of Shopee

B. Case study of Shopee in Vietnam

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• Shopee is an e-commerce platform where everyone can buy and sell without meeting face to face
• Shopee is a worldwide technology firm headquartered in Singapore that specializes mostly in e-commerce.
• Sea Ltd founded Shopee in Singapore in 2015

SHOPEETIKILAZADASENDO

Market share of these 4 e-commerce flatforms in the first hafl of 2022

20.0%

5.8%

1.4%

72.8%

- In Vietnam, when it first entered the e-commerce market, Shopee faced many significant competitors with the same target market as Tiki and Lazada.- Shopee is currently the most popular e-commerce platform in Vietnam

• Competition in the industry

1. Shopee's five forces model analysis

396

8761

2603

1698

Sales of e-commerce platforms in 30 days (VND billion) November 1, 2022 - November 30, 2022

2.1 TikTok shop – the new e-commerce platform in Vietnam

• TikTok shop launched in Vietnam market on April 28, 2022, an online shopping feature integrated in the TikTok social networking application

• Tiktok took 3 months to reach the sales Tiki built for 12 years, it took 6 months to almost reach the sales of Lazada built 10 years

2. Potential of new entrants into the industry

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Chozoi.vn

Besides TikTok Shop, the e-commerce market also witnessed the massive entry of a series of new businesses.

- Grab has deployed GrabMart- Super-fast delivery in 1 hour. - Grab has "aired" many supermarkets such as Co.opMart, Lotte, BigC, with a variety of products from fresh food to dry food, canned food, household appliances or cosmetics...

Grab Mart

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- The first e-commerce platform applying the auction form to buy things in Vietnam- Shoppers can find items with high identity value, participate in the auction experience, bid to buy the product with a chance of only 50% of the actual value.

2.2 "Rookies" massively entered the market

• Leveraging Influencers in every campaign

• Super Sale Campaign

- Shopee takes advantage of the current heat of trends to create impressive advertising TVCs=> They are highly viral and attract users in the most natural way.

• Catching the ultimate Trend with TVC Campaign

- Focusing on building the image and quality of product differentiation- According to the leaders at Shopee, "Going down the road of price competition will not last long, bottomless pockets will eventually have a bottom."

- The big promotion days are often the same day as the month- The opportunity to stimulate demand, attract buyers to take action

2.3 Shopee’s strategies

15/03/2022 The first "Super Consumer Festival'' event held by Shopee on March 15, 2022 has achieved memorable milestones.

2022: Shopee is still the most popular e-commerce site in Vietnam

2016: Shopee entered the Vietnamese e-commerce market. After only 2 years, Shopee hold the top 1 position

3. BUYER POWER

Customer bargaining power or customer power refers to how customers can put pressure on businesses to provide higher quality products, better customer service at lower prices.

=> The power of buyer is very high

number of transactions via ShopeePay wallet increased

1 new user

33 million

5 times

in every 6 users make a purchase for the first time

interactions during the program

number of orders sold increased in the first 2 hours

7.5 million

717 million

4 times

plays recorded on Shopee games

views on ShopeeLive

Shop Statistics

brands and distributors

sellers

active listings

7000

6 million

160 million

48.2%

40.1%

7.3%

4.4%

20.8%

Regional Statistics

79.2%

Shopee's current suppliers can be mentioned as:

• Online seller, Official store
• Corporate partners: Banks, credit card program
• Logistics

4. SUPPLIER POWER

=> The reputation of Shopee is really high

- Cooporated with many domestic and international shipping units

• Shopee partnered with 22 banks in Vietnam, in the future this number will increase.-Banks regularly have promotions when paying via card or ShopeePay wallet.

4P Marketing strategy

=> Conclusion: The pressure of substitution is not high

- Other platforms: Tiki, Lazada, Sendo- Store's websites - Shopping directly

PROMOTION:

- TVC campaings - "Localization" strategy: Hire local people to understand about the culture - Loyalty program

Shopping via smartphone, tablets or website

PLACE

- Encourages business owners to cooperate - Support shipping prices, freeship codes

PRICE:

- Many different languages- Diversified products: beauty, fashion, electronic devices, ... - Shopee Mall: Unilever, Adidas, Inochi, Samsung, ... - Attractive features: + Shopee Live: Livestream to sell products + Shopee Chat: Exchange information with customers

5. THREAT OF SUBSTITUTION

PRODUCT:

• Monitor technical advances

• DIVERSIFY

- Applying the localized strategy, operating effective campaigns- Be in partnership with any government trading to help local businesses develop and grow together

• Focus on advertising on other social media

- Develope the solid and qualified technical team, the strict security policies- Warn and notify users to proactively secure information and avoid being cheated

• Enhanced security

-Diversify categories and focus on the items with the most online shopping- Identify the right markets and potential products

- Have regular analysis and monitoring of technical and technological advances - Error of not accessing the application - Not have a suitable form of transportation for big size products

6. RECOMMENDATION FOR SHOPEE

??Whyyy

Porter's Five Forces Framework.

- A criticism is that it ignores "complementors." - Ignores other external forces such as Government and "extended" influencers. => It should be redesigned to address concerns and preserve the model's advantages. => Aim: presenting a multilevel model that fully describes the external influences on the system

C. Reinventing Porter’s 5 Forces Framework

- Factor conditions: + Evaluate the conditions + Consider the efficiency, quality and specialization + Affect creativity and labor productivity - Firm strategy, structure and rivalry: The development based on the firm's best conditions to promote and compete with other companies. - Demand conditions: Provide higher quality goods and services to be successful - Related and Supporting Industries: To succeed requires large numbers of capable suppliers

Opportunity and government are two decisive factors affecting the environment, which have an indirect impact on four main factors.

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