Porter‘s 5 Force Analysis - Competitive Rivalry of Kindergarten

Porter‘s 5 force analysis

Competitive Rivalry of Kindergarten

In business world, the competitions between companies happen every day and the competition among rival firms will decrease the profits. In preschools education industry, the competition is less intense and the threat to industry profitability is medium .Similar education program and good facilities in this industry are the main factors that cause the competitive in this industry. Competition among kindergartens are cost-based with firms continuously investing in their kindergarten to improve the facilities and new computer technologic .So to eliminate the competition between kindergartens, our kindergarten need to come out with better program to attract more student and organize an event like sport day and celebrate father day and mother day at our kindergarten .Due to the lack of number of kindergarten in Setapak area ,make our kindergarten to be success in this industry.

Buyer Power

The parents have the ability to affect the number of children in our kindergarten .If the kindergartens give a very good impression and the education program is good enough, the parent will choose the better kindergarten for their children .The treat to industrial profitability is medium because parent is the one to choose the kindergarten to their children so if our kindergarten have a good reputation and education program then it will be the first choose for parents.

Supplier Power

The power of suppliers in this industry is medium. The different between our kindergarten and other kindergarten is our kindergarten is design according to the designation of Disney .The chairs, tables and the graffiti on the wall are all designing with Disney cartoons. All the facilities and decorations in our kindergarten is custom made and this is the characteristic of our kindergarten. Since there is not much choices to change the suppliers and products our kindergarten cant just simply change our suppliers.

Threat of Substitute

In preschool education industry the threat of substitute is low. The kindergarten in Setapak area is not more than ten but the population at this area is around 300 thousands. The high population in this area has cause the lack of number of kindergartens .Besides, the price of tuitions fees and education program will affect the choice of parents .The tuitions fees of our kindergarten is almost similar to other kindergarten in Setapak area .However, our kindergarten provide a very suitable and good study environment for children and have high qualification teachers. As conclude, the tuition and facilities fees are deserve and fair so it is win-win for both sides between our kindergarten and parents.

Threat of new entrants

Preschools