Porter's five forces for Online Retailer "FLIPKART":

Supplier power:
Here, suppliers are the manufacturers of finished products. For any product,
there are many suppliers online,
so they can't show power on online retail companies. For example, if you take
computers category, there
are many suppliers like Dell, Apple, Lenovo, and Toshiba everyone wants to sell
their products through
online retails like Flipkart. Selling online saves a lot of money for the
manufacturers, and as many people
nowadays prefer purchasing product through online stores, Companies cannot
afford to lose this channel.
So, in this industry the supplier power is low.
Buyer power:
Buyers in this industry are customers who purchase products online. Since this
industry is flooded with so
many players, buyers are having lots of options to choose. With many
competitors like [Link], eBay,
Snapdeal etc. Customers get a wide range of choices. Customer would prefer the
one who would provide
goods at reasonable price, deliver it fast and provide them with other benefits
like Cash on Delivery, EMI
facilities, other offers etc. Here Buyers have more power.
Competitive Rivalry:
Competition is very high in this industry with so many players like Jabong,
Snapdeal, Amazon,
Homeshop18 etc. Many competitors means more choices for the customer to
choose from. This also
increases the cost incurred by the company to stay in the customer's mind i.e. on
Promotions and
Advertisements etc. Giving the customer better deals, making customer's
experience delightful and
continuous innovation can help a company to stay at top even with tons of
competitors around. Overtaking
Myntra was a very intelligent move by Flipkart done to overcome the competition
given by Myntra.
Threat of New Entrants:
Threat of new entrants is very high in this online retail industry because of
following reasons:
> Indian government has allowed 51% FDI in multi-brand online retail and 100%
FDI in single brand
online retail. So, this means foreign companies can come and start their own
online retail companies.
There are very less barriers to entry like less capital required to start a business,
less amount of
infrastructure required to start business. All you need is to tie up with suppliers
of products and you
need to develop a website to display products so that customers can order
products, and a tie up with
online payment gateway provider like bill desk.
> Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by
2021. Industry is
going to experience an exponential growth rate. So, obviously no one wants to
miss this big
opportunity.
With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top
position, Flipkart
needs to devise new strategies to avoid this threat from new entrants.
Threat of substitutes:
Substitute for this industry as of now is physical stores. Their threat is very low
for this industry
because customers are going for online purchases instead of going to physical
stores as it will save
time, effort, and money. With the advent and penetration of internet and smart
phones, future in
retail belongs to online retail.
When we compare relative quality, relative price of product a person buys online
with physical
store, both are almost same and in some cases, online retail store offers more
discounts and this
attracts the customer to purchase products online.
RECOMMENDATIONS FOR FLIPKART:
Flipkart was not into fashion and apparels business in online retail. Since the
margins are very high in this
space, Flipkart cashed on this opportunity by overtaking the most famous player
in this category -"Myntra".
With some more small moves Flipkart can earn more profits, they are-
. Since online retail is going to boom in the coming years, it is necessary for this
industry to have
logistics support. Since Flipkart is already having its own logistics arm "E-kart", it
can provide this
logistics service to its competitors in online retail industry and make more profits.
· In this industry, price matters a lot to customers. If same product is offered by
two retailers at two
different prices, customers will go for the lowest price. So, Flipkart should try to
offer the products
at lower prices. This can be done by optimizing its logistics services. Since
logistics cost plays an
important role in determining the price of the product. Flipkart should try to
optimize its supply
chain in such a manner that its supply chain costs decreases and thereby
product price too
decreases.
. Big data and predictive analytics are going to play a big role in the future. There
are many tools
like R, SQL available to mine the data and to find out the patterns. So, Flipkart
can use data about
its customers like what are they buying, what are their buying patterns and can
target them by
using predictive analytics. For example, Amazon uses customer's purchase
history and suggests
products according to it.
. Flipkart can also employ relationship marketing into it. Instead of mainly
focusing on customer
acquisition, it should also focus on customer retention. Because loyal customers
are more
profitable when compared to new customers.
A

Supplier Power
In this industry, suppliers are the producers of finished products like Apple, Dell,
Nike, etc. Online retail companies sell
different products ranging from computer accessories to cosmetic's to apparels
to clothes. Since there are many
producers for any specific category, they cannot show their energy on online
retail companies. For example, if you see the
computers category, there are many producers like Apple, Lenovo, Toshiba and
Dell, who desires to sell their products
using these online retail companies. So, they will not be having the ability to
operate the online retail companies. Online
customers can choose the products and the changing costs in this scenario are
zero. It is hard for manufacturers of
finished products to come into industry because of challenges in Logistics. Online
retail industry is important to producers
because it plays as one of the medium to sell the products. Now, most of the
customers are purchasing online through
online companies, they can't risk to lose this medium. So, they can't state their
terms with online retail companies. So, in
this industry the producer's power is low.
Buyer Power
Purchasers in this industry are clients who purchase the items on the web. Since
this industry is in flood of numerous
players, clients are having part of choices to choose the things. Changing
expenses are likewise less for purchasers since
they can without much of a stretch change benefit from one online organization
to other one. Same items will be shown in
a few online retail sites. In this way, item separation is low. In this way, every one
of these elements make clients to have
more power when contrasted with online retail organizations.

Threat of New Entrants

. Threat of new participants is high in this online retail industry in view of taking
after reasons:
. Indian government will permit 51% FDI in multi-mark online retail and 100% FDI
in single brand online retail at some
point or another. Along these lines, this implies outside organizations can come
and begin their own online retail
organizations.
. There are less boundaries to passage like less measure of cash required to
begin a business, less measure of framework
required to begin business. All you need is to tie up with providers of items and
you have to build up a site to show items
so clients can arrange items, and a tie up with online installment portal supplier
like bill work area.
. Industry is additionally going to develop at a fast rate. It will touch 76 billion $
by 2021. Industry will encounter an
exponential development rate. Along these lines, clearly nobody needs to miss
this huge open door.
Threat of Substitutes
Substitute for this industry starting at now is physical stores. Their danger is low
for this industry since clients are going for
online buys as opposed to going to physical stores as it will spare time, exertion,
and cash. With the coming and infiltration
of web and advanced mobile phones, future in retail has a place with online
retail. When we think about relative quality,
relative cost of item that he/she purchases online with physical store, both are
practically same and now and again, online
rebates will be accessible which makes clients to purchase items on the web.

Rivalry with in Industry

Flipkart is facing a lot of competition from many online retailers like Snapdeal,
Amazon, Homeshop18, Indiaplaza and
many more. Flipkart is working in online retail industry. Online retail industries
worth's 1.4-1.6 billion dollars. According to
a recent TechnoPak report, e-tailing has the abilities to grow in more than
hundred-fold in upcoming 9 years and to reach
$76 billion approximate in 2021. This growth will be increased by the country's
growing Internet users, which will may be
comprising 180 million broadband users approximate 2020, and a rapidly
increasing class of Internet users. In few years,
Indian online retail industry will grow to approximately 10 billion dollars. Some of
the major challenges faced by online
retailers are education, trust and customer loyalty. Many customers like Cash on
Delivery option in place of credit/debit
card payment. Rivalry is high in this industry with such a large number of players
like Flipkart, Myntra, Jabong, Snapdeal,
Amazon, Indiaplaza, Homeshop18 and so on.