Porters five forces analysis
The demographic factors that can affect the mobile phone repair sector include race, population dynamics, gender, and age. These factors can significantly affect the industry positively by providing diversification to the industry. An opportunity can be provided to the sector when it attracts people from all races in the world. When the industry is dominated by only one race, legal laws can sometimes be undermined like discrimination, which can negatively affect the sector, thus posing a threat to its profits.
The threat of new entrants
The position of the cell phone industry is under threat from new entrants as the possibility of many people entering the market is very high. It is because the establishment of this business sector requires a low capital outlay; there are no requirement regulations like licensing to provide services and also the number of multi-location competitors is limited. Rivals can therefore quickly enter the market of the cell phone repair industry as a result of the little effort to joining it as well as little protection for key technologies, thus weakening its position.
Intensity of rivalry
This factor poses a threat to the industry as we look at its competitors in the market, who they are, and what quality of services do they provide. In this case, firms in the industry can attract customers by aggressively cutting down prices. The sector, however, is likely to have tremendous profits when there is a minimal competitive rivalry.
Threat of substitution
The industry is also under threat from its customers finding alternative ways for their damaged cell phones and tablets as they can decide to buy a new phone rather than taking the old one for repair given the repair costs are not favourable. One’s ore alternatives enter the market provided they are comfortable and cheap to acquire, can automatically weaken the position the cell phone repair sector as well as threatening its profitability.
Bargaining power of customers
This factor poses a threat to the sector in such a way that the customers might be having the potential to drive the sector’s market prices down. When the industry is dealing with just a few customers, they would likely have much more ability to influence the market prices unlike when the industry has more customers which increases its powers to dictate the market prices. For instance, the mobile phone repair industry has limited corporate options making it have fewer customers.
Bargaining power of supplier
The suppliers can also pose a threat to the market of the mobile repair sector as they can quickly increase their prices depending on how many they are supplying to the industry in focus. The industry can easily switch to a cheaper alternative provided it has more options to choose from. However, the suppliers’ position can become stronger and increase their prices when they are few. It, therefore, will affect the sector’s profit.