Impact Of Internet And Technology Samples †MyAssignmenthelp.com

Question: Discuss about the Impact Of Internet And Technology. Answer: Critical analysis and discussion the impact of internet and digital technology on each five competitive force Five competitive forces refer to Porter five forces. The five competitive forces are threat of new entrants, threat of substitute, bargaining power of customers, bargaining power of suppliers and industry rivalry. As commented by Wang and Zhang (2015), these five forces are associated with competitive advantages. In order to gain competitive advantages in a new or existing marketing, an organization need to analyze these five forces based on which they can develop their strategies. In the recent years due to rapid enhancement of internet and technology the business becomes dynamic in nature and this emerging technology leaves a big impact on Porter Five Forces model. Impact of internet and digital technology on Threat of new entrants The nature of competitors is being changed due to emerging technology. By using the digital technology the new entrants are able to bring in state of value proposition and art of business model. By using, social, mobile and cloud technology the competitors can easily make a platform for them in a new market. Therefore, the cyber security reinforces their entry as a result; it is difficult for an existing organization to get any information regarding their new competitors. In the recent years, Kuwait becomes popular for emerging technology (Eskandari et al. 2015). Kuwait has been transformed into a global city by incorporating new technology in business sectors. This country attracted skill talent around the world. However, the hospitality and tourism sectors also started to follow modern technology to compete in global market. As for example, Oriental Restaurant is a small hospitality sector of Kuwait. In the recent years, this organization has been facing a great threat of new entra nts due to emerging technology in this country. As commented by Mavimbela and Dube (2016), the nature of competition is changed by digital business. Today the existing business organization needs to focus on the new entrants in the industry as the new competitors are equipped with digitally-based value proposition and business model. As argued by Fung (2014), digitalization is good for new entrants while it brings threat to existing business. On the other hand, e-business model enables the competitors to get easy entry as the companies take few activities in-house and value chain. As a result, the complexity in management becomes decreased and the threat of new competitors may go up. In the context of Oriental Restaurant, new entrants may use the digital technology and get an easy entry in Kuwait hospitality industry. This will accelerate the new entry for this organization. Effect of digital technology and internet on threat of substitute Digital technology and internet enhance the threat of alternative product in similar industry (Mavimbela and Dube 2016). For an organization, the switching cost is low due to use of digital technology. Therefore, the customers have a tendency to switch from traditional model to a new model. As for example, Oriental Restaurant provides home delivery by taking order via phone. However, if another organization offers more advanced option to the customers by utilizing digital technology then it will bring a big challenge for this organization. In the recent years the hospitality sectors in Kuwait and other countries focus on the mobile app, which is a big aspect of digital technology. Hence, the competitors of Oriental Restaurant may offer the mobile app to the customers via which they can place their order quickly. This affects the traditional service model of hospitality sectors and facilitates the threat of alternative product in the similar industry (Sutherland 2014). Impact of digital technology on bargaining power of customers Bargaining of customers is one of the major forces among the five competitive forces. The main focus of the digital business is need and expectation of the customers. As stated by Zhang (2017), internet and digitalization allow a business to identify their customer needs by checking their feedback on social media and company website. However, in the recent years, customers have increased their bargaining power through the rapid use of internet. As criticized by Weiss et al. (2018), customer gets easy access to information via internet, which enhances price sensitivity. In Kuwait hospitality sectors by using the social media and websites of the restaurants through search engine the customers are able to find the substitute of products. On the other hand, internet allows the customers to compare the price of different organizations in a similar industry, which enhances their bargaining power. In the context of Oriental Restaurant, their customer can compare the price and service of thi s organization with other organizations via social media by checking the information regarding the service. This will bring a big threat to this organization and increase industry competitiveness. Effect of digital technology and internet on bargaining power of suppliers At present bargaining power of suppliers is increased as the accessibility of information increases. As mentioned by Zaroki and Owliaiynasab (2018), digital technology may increase or decrease the bargaining power of the suppliers. However, suppliers those follow the digital business model are able to accelerate their bargaining power by utilizing information via internet. On the other hand, suppliers those want to follow traditional business model may use their bargaining power slow down. Development of smart products by using technology is revolutionizing the bargaining power of suppliers. Therefore, the software replaces the physical components as well as physical tailoring. As a result, the significance of traditional suppliers to total service or product cost often declines; as a result, their bargaining powers can fall. Effect of internet and digitalization on rivalry in the market The rivalry is the great player among the competitors in the global market. Hence, digitalization and internet just add fuel to fire in recent years, which allows the existing competitors to give more focus on digital technology (Schmidt 2018). Hence, the rivalry is growing as the existing barriers are going down due to the low cost of digital business model. In the context of Oriental Restaurant, it has been found that it is a small organization and always under the threat of rivalry in Kuwait hospitality industry. Thus, emergence of internet and digital technology may bring a big challenge for this organization. The rivalry can be connected easily with the stakeholders by applying digital technology, which influences this competitive factor positively. Critically discuss four threats of entry to new entrants in small-scale entrepreneurship in Kuwait and suggestions to overcome these threats A new business has to face major threats while entering in a small scale ownership in Kuwait. One of the major threats is the government policy. However, it is important for the foreign company to follow the rules of regulatory body while entering into a new market (Zaroki and Owliaiynasab 2018). The domestic business organizations do not have to follow the foreign policy. Kuwait government does give scope to the new entrant easily while entering into a small business chain. There are several contradictory policies which resist the new entrants to get an entry in a market. Kuwait government has inconsistent policy based on which the organization only recruits the employees for only pre-verified position. As per the Council of Ministers Decision No.75 of 2015 foreign investors are not allowed to invest in oil, gas, real estate and coke manufacturing zone (Export.gov 2018). This is a big threat for new entrants in Kuwait small chain market. Lack of proper resources and capital is another major threat of new entrants in Kuwait market. However, Kuwait is an expensive place thus, the new entrants need to have more capital to get entry in any small market. In Kuwait non-petroleum related manufacturing zone and agriculture sectors are limited. As for example, in food packaging sector new entrants need more capital and more workforces. However, the labor law is complex in Kuwait thus; it is difficult for a new organization to manage the workforce and capital while entering in small chain market in Kuwait (Export.gov 2018). Threat of existing competitors is another barrier to entry to new entrants in small-scale entrepreneurship in Kuwait. However, food packaging industry is a small sector of Kuwait hence; already many competitors are present in this sector, which resists the entry of new organization. Apart from this product differentiation is another big threat of new entry in a small market. However, for a start-up business, it is difficult to create product variation as their budget is low and Kuwait is an expensive country. In the recent years, transit packaging is most preferable packaging as it is one type of e-commerce packaging and most consumers like to do online shopping. Hence, the customers in this country want more variation in product characters, which creates a big threat for a new organization to get entry in small chain entrepreneur market in Kuwait (Export.gov 2018). In order to cope up with above threats, the start-up business should follow cost reduction, market analysis, and promotional strategy. In order to deal with complex government policy the new organization, Kuwait needs to make transparency in their business and to comply with legal requirements. Therefore, the small business has a tight margin and low capital thus; they need to follow lower marketing cost strategy. This can be done by replacing the traditional marketing with digital marketing. The small business should leverage the power of internet, which will reduce their operation cost. To gain competitive advantage and deal with existing competitors in a new market a business needs to develop unique product by using product development strategy. This will also help to reduce the pressure and cost of product differentiation. However, the customers of Kuwait market prefer new product. Hence, introduction of new featured product will help the entrepreneur to deal with the threat of p roduct differentiation and existing competitors. References Eskandari, M.J., Miri, M., Gholami, S., Reza, H. and Nia, S., 2015. Factors Affecting The Competitiveness of The Food Industry by Using Porter's Five Forces Model Case Study in Hamadan Province, Iran. Journal of Asian Scientific Research, 5(4), pp.185-197. Export.gov. 2018.Kuwait - 1-Openness to Restriction on Foreign Investment. [online] Available at: https://www.export.gov/article?id=Kuwait-Openness-to-Foreign-Investment [Accessed 23 Mar. 2018]. Export.gov. 2018.Kuwait - Market Challenges. [online] Available at: https://www.export.gov/article?id=Kuwait-Market-Challenges [Accessed 23 Mar. 2018]. Fung, H.P., 2014. Using porter five forces and technology acceptance model to predict cloud computing adoption among IT outsourcing service providers. Mavimbela, R. and Dube, E., 2016. Can an Internet Adoption Framework be Developed for SMEs in South Africa. Journal of entrepreneurship and innovation in emerging economies, 2(2), pp.120-135. Schmidt, A., 2018. Strategic Reorientation Due to Competitors Disruptive Innovation. In German-Turkish Perspectives on IT and Innovation Management (pp. 89-108). Springer Gabler, Wiesbaden. Sutherland, E., 2014. Lobbying and litigation in telecommunications marketsreapplying Porters five forces. info, 16(5), pp.1-18. Wang, F. and Zhang, X.P.S., 2015. The role of the Internet in changing industry competition. Information Management, 52(1), pp.71-81. Weiss, J., Stephan, A. and Anisimova, T., 2018. Well-designed environmental regulation and firm performance: Swedish evidence on the Porter hypothesis and the effect of regulatory time strategies. Journal of Environmental Planning and Management, pp.1-22. Zaroki, S. and Owliaiynasab, M., 2018. An Investigation of Effective Factors in the Growth of the Tourism with an Emphasis on Destination Competitiveness (Application of DPDM and GMM-Sys Estimator). Quarterly Journal of the University of Mazandaran Vol, 6(23), p.14. Zhang, D., 2017. Porters Five Forces Analysis and Value Chain Analysis of AUX Air-conditioning Co., Ltd. DEStech Transactions on Social Science, Education and Human Science, (icsste).