PORTERS FIVE FORCE MODEL
ON INDIAN E-SUPPLY CHAIN
MANAGEMENT Presented By,
Moumita Bhattacharjee and
2nd sem – IB
->The Indian online retail market, major e-tailing firms like Flipkart, Snapdeal and
Amazon have adopted asset light model and hence moved away inventory based
model to marketplace model. Private equity players and venture capital firms have
shown their faith in the growth of online retail in India and it is evident with Flipkart
receiving eight rounds of funding over the last seven years.
->But with immense growth opportunities, the online retail market faces the
challenges in terms of logistics services as the key to online retail is to deliver
products on time. Logistics and infrastructure, huge maintenance cost of warehouses,
costly middlemen, and error in online payments are a few of the bottlenecks in the
growth of the industry
• To understand the basic functions of Supply chain Management.
• To know about the potential of E-tailing in India.
• To know about the threats and competition that affects India’s E-tailing.
• To understand from the porters five force model and to analyze the E-tailing and E-
SCM in India.
What is E-SCM?
Electronic Supply Chain Management (e-SCM) is an optimization of business
processes and business value in every corner of the extended enterprise - right from
your supplier's supplier to your customer's customer.
What is E-tailing?
E-tailing or e-retailing refers to the selling of retail goods electronically over the
Internet. The term is a short form for "electronic retailing", and surfaced in the 1990s
for being frequently used over the Internet. The term is an inevitable addition to other
similar terms such as e-business, e-mail, and e- commerce. E-tailing usually refers to
the business-to-consumer (B2C) transactions.
THREE TYPES OF E-TAILING
Click – The businesses that operate only through the online channel fall into this
category. Prominent examples in this category include: Dell, Amazon.com and e-Bay
Click and Brick– The businesses that use both the online as well as the offline
channel fall into this category.
Brick and Mortar – This is the conventional mode of retailing. The businesses that
do not use the latest retailing channels and still rely upon the conventional mode
belong to this category
BARGAINING POWER OF THE
The power of the suppliers gets higher when the e-tailers (electronic retailers) have
less alternatives for the preparation of them. However, many E-SCM have numerous
options of suppliers. E-SCM, on the one hand, can give E-tailers (electronic retailers)
the access to different suppliers and on the other hand, E-SCM tends to provide equal
access to e-tailers (electronic retailers) for all suppliers, and creates a different channel
for suppliers to achieve etailers (electronic retailers)
-> Dependency - low
THREAT OF SUBSTITUTES
The threat of alternative products or services in the electronic market is high, because
there are a large number of alternatives suppliers and E-tailers(electronic retailers).
The larger number and alternative of closer products increase the etailers trends
(electronic retailers) to switch between suppliers.
-> Reduces cost of switch over
THREATS OF NEW ENTRANTS
E-SCM reduces the entry barriers and makes market entry easier. Increase in suppliers
makes the transmission of power to e -tailers (electronic retailers). There is no
obstacle for entrance of providers to supply chain e-tailing. So, because of the
convenience of the increasing number of e-tailers suppliers (electronic retailers), the
level of competition between them increases at any time. E-SCM lowers the costs of
suppliers' switching. E-SCM lowers difference among competitors. Keeping dedicated
E-SCM applications for the newcomers is difficult.
->Threat of new entrants - High
BARGAINING POWER OF E-TAILERS
The power of E-tailers (electronic retailers) is more than suppliers once that the e-
tailers (electronic retailers) have more choices than the suppliers. In addition, E-tailers
(electronic retailers) may lower themselves to work easily with suppliers.
-> Bargaining power - High
COMPETITION FROM RIVALRY
The intensity of competition's intensity is one of the major factors for the
competitiveness of the E-Tailing industry. There are many electronic stores about the
same size and with a small distinction between products and services. Due to the lack
of any obstacle to market entry and the presence of a large number of suppliers and
E-tailers (electronic retailers), there is a higher level of competition among them as
well as with each other. E-SCM generally makes the industry more efficient.
-> Competition from rivalry - High
SIX BIG TRENDS THAT CHANGE THE SCM INDUSTRY
More Mega Cities
Proliferation of segments
Improved Supply chain Infrastructure
Better Regulatory Climate
Stronger Global Connect
Affordable and Accessible Technology
• Supply chain 2025 – trends and implications in India By A.T.Kearney
• Analysis of the effect of e-supply chain management (e-scm) on retail industry By
Zeinab Zarat ,Dakhely Parast, Saeed Vanaki and Farsad Abdar