Chatime's Competitor in Malaysia
“The Competitive Forces of Chatime”
Chatime first has to consider the five factors that will affect the business performances – new entrants, substitutes, buyers, suppliers and the degree of rivalry between competitors to analyse its competence in the beverage industry. These forces would determine the firm’s attractiveness and its long run profitability in the industry. With Michael Porter’s five forces model, we can briefly study the strength of the current position Chatime is in and the directions we’re moving into to sustain in the beverage industry in Malaysia (tutor2u.com, n.d). Figure 2 shown would depict the significance of competitors being a threat to Chatime if we neglected these major forces of the business (Mindtools, n.d)
Figure 2: Porter's Five Forces on Chatime in the Beverage Industry
Firstly, the threats of new entrants and new substitutes where these two forces similarly play the role of deciding on whether or not to mark the selling prices of Chatime beverages. An example of a new beverage company intending to sell bubble tea drinks with similar quality and prices would be labelled as ‘New Entrant’ to Chatime. This is because regular and potential buyers of Chatime may want to substitute Chatime to the newer competitor. Next, both the bargaining power of buyers and suppliers would depend on the situation of market share of the company.