Threat of new entrants

9 September 2016

Sufficient suppliers to support new entrants: a fragmented industry means there are sufficient suppliers for new entrants to “discover” to build relationships with, and even Winestyr’s existing customers would probably want to build additional distribution channels 3. Easy for existing brick and mortar sellers to enter as they already have a customer base and are likely to have industry/regulation knowledge as well Bargaining Power of Suppliers

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Could potentially increase in the future when there are new competitors in the market and Winestyr’s existing suppliers are likely to try building additional distribution channels Bargaining Power of Buyers 1. High – ecommerce implies easy comparison of prices, high customer acquisition costs for Winestyr but close to zero for buyers to compare prices and “jump” to another site (it’s almost a perfectly competitive market) 2.

However, if they are targeting buyers who are eager enough to find out about craft wines and related information, Winestyr could extract value by being a “value-add” seller and not just an ecommerce site Threat of Substitutes (Complements) – 1. Beer, spirits, non alcoholic options 2. Other online wine sellers 3. Potential complements – wine pairing sites, culinary institutions (for educational/marketing purposes), food sites etc. Threat of new entrants .

Sufficient suppliers to support new entrants: a fragmented industry means there are sufficient suppliers for new entrants to “discover” to build relationships with, and even Winestyr’s existing customers would probably want to build additional distribution channels 3. Easy for existing brick and mortar sellers to enter as they already have a customer base and are likely to have industry/regulation knowledge as well Bargaining Power of Suppliers

Currently low – fragmented industry 2. Could potentially increase in the future when there are new competitors in the market and Winestyr’s existing suppliers are likely to try building additional distribution channels Bargaining Power of Buyers 1. High – ecommerce implies easy comparison of prices, high customer acquisition costs for Winestyr but close to zero for buyers to compare prices and “jump” to another site (it’s almost a perfectly competitive market).

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