When studying the potential for a new business or product, a SWOT analysis helps in determining the likely risks and rewards. This analysis is a simple but widely used tool that helps in understanding the internal strengths and weaknesses and the external opportunities and threats.
STRENGHTS
According to all the information gathered and the questions answered by the managers, the strengths of the company are many.
First of all, the main competitive advantage of SIDEM is the high quality of their products; this is the main factor that differentiates them from their competitors. They have many awards and certificates and especially quality certificates, which guarantee us that they are a high quality aluminum company (see Appendix B). SIDEM differentiates itself by …show more content…
The five forces model was developed by Michael Porter to examine the competitive environment in which a company works.
Bargaining power of supplier
We will begin by analyzing the bargaining power of suppliers. All businesses need raw materials as inputs to their activity; in this case it is the aluminum. This requires a strong customer and supplier relationship. The bargaining power of suppliers is low for aluminum smelters as they have their own mines for major raw material. It may become high if suppliers are powerful enough to add significant cost to switch suppliers.
Bargaining power of customers
Aluminum being a commodity, the industry has many customers. The bargaining power of customers is high, because in the aluminum market where many companies compete, the customer will make the choice of where from they want to get the final product. The customers depending on their requirements (quality product or low price product) will make their decision accordingly. SIDEM offers high quality products, other companies offer the same products but with lower quality and lower prices.
Threat of new