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Data Processing and Analysis Techniques

The threat of new entrants into the chloro alkali industry in Pakistan is high due to the need for heavy investment and R&D. The threat of substitutes is low as soda ash is the only substitute but does not provide identical results. The bargaining power of suppliers is low since key raw materials of salt and electricity are controlled by the government. The bargaining power of customers is also low since there are few sellers offering standardized prices and products without differentiation. Competitive rivalry is moderately high as there are a few companies with standardized products and prices competing primarily on technology and production capacity.

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Aaftab Ahmad
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63 views2 pages

Data Processing and Analysis Techniques

The threat of new entrants into the chloro alkali industry in Pakistan is high due to the need for heavy investment and R&D. The threat of substitutes is low as soda ash is the only substitute but does not provide identical results. The bargaining power of suppliers is low since key raw materials of salt and electricity are controlled by the government. The bargaining power of customers is also low since there are few sellers offering standardized prices and products without differentiation. Competitive rivalry is moderately high as there are a few companies with standardized products and prices competing primarily on technology and production capacity.

Uploaded by

Aaftab Ahmad
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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3.

0 PORTER FIVE FORCES MODEL


3.0.1 Threat of New Entrant
The threat of new entrants in chloro alkali industry of Pakistan is high because there are only entry barriers are heavy investment and extensive R&D. Also there is no involvement of distribution channels till now because this industry produces B2B products. And government has imposed a heavy tax on importing chemicals to supporting domestic production.

3.0.2 Threat of Substitute


Threat of substitute is very low because only soda ash can be used against the caustic soda but it does not give the perfect result but at some extent it can be use. The production of soda ash is very limited and not efficient as caustic soda is. Soda ash can not be as substitute in each relative product.

3.0.3 Bargaining Power of Supplier


Bargaining power of supplier is low because main raw material in this industry is salt and electricity which are owned by government, salt mines are owned by govt. (PMDC) and electricity is distributed only by WAPDA so in this way bargaining power of supplier is very high. Some units have own their own power plants which are running on sui gas and again sui gas is distributed by sui northern gas pipeline limited.

3.0.4 Bargaining Power of Customer


Bargaining power of Customer is very low because there are only few companies who are selling this product and having joint venture in selling the standardize product through standardize price with no specific product differentiation. Also no other good substitute exists against it.

3.0.5 Competitive Rivalry

Competitive rivalry is moderate high because there are few companies in Chloro alkali industry of Pakistan and have standardize product and price. All competitors have high fixed assets. They are only competing on technology and production capacity.

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