2 The Importance Of Michael Porter — страница 2

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quite high for property management industry. The major costs include:l salary/wages, retirement & medical benefits of direct staff;l cleaning services;l security guard services;l public utility bills (e.g., water, electricity, telephone, fax, etc.)l repair & maintenance cost (e.g., lifts & escalators, air-conditioning system, public antenna, pumping & drainage, fire alarm system, security system, etc.)l insurance (e.g., property-all-risk, third party liability, employee compensation, machinery breakdown, money-all-risk, fidelity, etc.)l ratesl staff uniforml advertising (for the company & for recruitment of staff)In addition, the new entrants are difficult to achieve economies of scale as well as having better bargaining power & quantity discount. These

new entrants will have a price disadvantage compared with the market leaders or competitor with large market share. 2.1.4 Access to Distribution ChannelsAs the major land developers all having its associated management company, the remaining market is small and extremely competitive. The new entrants will need to adopt extensive promotional activities and intensive selling to the landlords/ tenants. 2.1.5 Government PolicyBoth the previous Hong Kong Government and the existing Government of Hong Kong Special Administrative Region put no limits to the entry of new company into the industry. However, there are many laws & regulations that property management company has to comply with it. For example, Building (Administration) Regulations, Building Management Ordinance, Housing

Ordinance, etc. 2.2 Bargaining Power of Suppliers/ContractorsFactors like the degree of supplier concentration and the availability of substitute inputs will determine the power that the suppliers/ contractors have over the companies in the industry. Fortunately, the bargaining power of suppliers/ contractors in property management industry is relatively low. The main suppliers that management company requires are security service company, cleaning service company, and some others companies for maintenance and repairing. As their markets are very competitive, the bargaining power of them is insignificant. 2.3 Bargaining Power of BuyersFactors like a buyer’s volume, buyer’s information, and the availability of substitute products will determine the amount of influence that

buyers have in an industry. In fact, the bargaining power of buyers, (which could be the landlords, individual owners or tenants) are only moderate. Especially for those management companies which are affiliated with the land developers/ landlords, the bargaining power is almost not exist. Although it is the individual owners/ tenants who consume the service directly, it is the landlords of the premises who choose and pay the management company. The individual owners/ tenants have only little or even no influence on the decision in selecting the property management company of their building. 2.4 Threat of Substitute Products or ServicesFactors like switching costs and buyer loyalty will determine the degree to which customers are likely to switch their business to another

competitors. For the property management industry, the threat of substitute services is minimal. Every building requires a certain level of management and care taking. Owing to the decreasing numbers of single or low-storey houses and increasing numbers of high density estate homes and high-rise buildings, the demand of much formal or professional management service is keep increasing so as to cope with the higher standard of living in Hong Kong. 2.5 Rivalry Among Existing CompetitorsFactors like industry growth and product differences will determine how intense rivalry among companies in the industry. Basically, the competition and rivalry for property management are not so keen just because the potential market is keep booming. There will be a continual demand for commercial

premises, e.g., office tower, shopping arcade, etc., as the economic foundation of Hong Kong remains solid. The gradually lowering of inflation rate and implementation of large infrastructure projects now under way will likely continue to enhance the overall growth of the economy. Moreover, the demand for residential premises will continue to be strong due to the positive growth prospect of the Hong Kong population in the near term contributed in part by more than fifty thousand immigrants permitted from the People Republic of China each year. The government planning authorities have recently made known their view that Hong Kong will continue to encounter a sizable shortage of residential units for the first few years after the turn of the decade. With the limited housing supply