Appendix- 1: Porter’s 5 force model:

1. Entry barriers : LOW ↓

Threat of new entrants is high, as there is very little cost involved in setting up an ecommerce website and operations
are also relatively cheaper.
a. Product differentiation- Low (except for in-house product ranges like BB Royal, tasties, Fresho etc.)
b. Brand identity – Low but improving (with emergence of product ranges like Good diet, Fresho etc.)
c. Switching costs- Nothing
d. Capital requirements- Low
e. Access to distribution- Easy
2. Determinants of supplier power: Low ↑
Bargaining power of suppliers is comparatively low as there are many suppliers in the market, and therefore the
ecommerce companies have the power to choose their suppliers.
a. Differentiation of inputs - Low
b. Switching costs of suppliers and firms in industry- Low
c. Presence of substitute inputs - High
d. Supplier concentration- Low
e. Importance of volume to supplier- Low
f. Cost relative to total purchases in the industry- Low
g. Threat of forward integration relative to threat of backward integration by firms in the industry – High
3. Rivalry Competitive: High ↓
Competition among major players is very high, as there is no switching cost for customers. The players are constantly
competing on the basis on price as well as other factors that influence buyers’ choice like quick delivery, discounts and
offers, variety, customer service etc.
a. Industry growth - Low
b. Fixed or storage costs - Low
c. Product differences - Low
d. Brand identity - Low
e. Switching costs - Low
f. Diversity of competitors - High
g. Corporate stakes - High
h. Exit barriers – Low
4. Threat of Substitutes : High ↓
As there are a lot of sellers with similar products and services most of these indifferent products can be treated as
commodities; and there is no switching cost for customers.
a. Relative price performances of substitutes - Competitive
b. Switching costs- Low
c. Buyer propensity to substitute- High
5. Buyer power: ↓
Bargaining power of customers is very high as there are many players in the market with similar products and there is
no switching cost. Buyers prefer the company that offers the best price among other factors
 Bargaining leverage: Low
a. Buyer volume- Low but improving
b. Buyer switching costs relative to firm switching costs - Low
c. Buyer information- Only some asymmetry exists
d. Ability of backward integrate- High
e. Substitute products- High
 Price sensitivity
a. Price/total purchases- Low
b. Product differences- Low
c. Brand identity- Low but improving
d. Impact on quality/ performance- High