A structural analysis of the German Web Design industry by using the model of Porter's five forces

Term Paper (Advanced seminar), 2010

21 Pages, Grade: 2


Table of contents

List of figures

1 Introduction

2 Porter’s five forces
2.1 Intensity of rivalry
2.2 Bargaining power of buyers
2.3 Bargaining power of suppliers
2.4 Threat of entry
2.5 Threat of substitutes

3 Critical review of Porter’s 5 forces

4 Conclusion

Reference List


List of figures

Figure 1: Registered .de-domains

Figure 2: Substitutes of a web site

Figure 3: Porter’s five forces in relation to the web design industry

1 Introduction

The turnover of e-commerce is still growing. German economic analysts expect a growth of another 10 percent for 2010 (Statista, 2009). Compa­nies need to sell their products online in order to stay competitive. But in today's online environment it is not only enough to offer their products on the internet, but also a well structured online shop which can be found in search engines. To realize this, companies need web designers and on­line marketers. There is still a lot of money involved but is it really worth going into this market? (Tedeschi, 2007)

This piece of work analyses the German web design industry by using the strategic management tool of the five forces from Michael E. Porter. This tool identifies the key factors that could have an impact on industry com­petition and whether it is worth entering market or not (Porter, 1980, p.33). This work is limited to the German market because there are differences between other national markets dependent on their technological advance, demographical factors and cultural backgrounds. For instance an emerg­ing nation like Argentina had a growth of 32 percent in the last 12 months in the e-commerce sector and the German market, as a high industrial na­tion had a growth of only 11 percent (Verisign, 2009).

The model of Porter’s five, which is almost thirty years old, is chosen in order to prove that it is still working with a modern industry like the web design industry. Many essential factors have changed in the last thirty years and it has to be proved if the principle “The state of competition in an industry depends on five basic competitive forces” (Porter, 1980, p.3) is still valid. This external analysis tool was created to cover a wide range of influences affecting an industry. It is used to acquire the awareness about the attractiveness for further research. Companies have to have a good knowledge about their environment but it is not the only model to make decisions.

2 Porter’s five forces

2.1 Intensity of rivalry

In November 2009 there were more than 13 million .de-domains registered in Germany. In addition to that Germans also use .com- and .net-domains for their web pages. (Denic, 2009) All of these web pages are created by web designers who often have private intentions to put a profile of them in the internet but the majority have commercial intentions. There is an un­countable amount of agencies, self-employed or part-time web designers who all offer the same product for privates, small companies or whole en­terprises just in Germany. There is still a growth of about 10 percent each year, so there is a constant entry of new competition into the market to cover the high demand of web pages. (Statista, 2009)

Figure 1: Registered .de-domains

Abbildung in dieser Leseprobe nicht enthalten

Source: Denic, 2009

Potential customers have a transparent market where they can choose the company they want. They can compare prices and services very easily through the internet. Furthermore customers do not make decisions due to barriers they have in a market outside the internet.


Excerpt out of 21 pages


A structural analysis of the German Web Design industry by using the model of Porter's five forces
University of Lincoln  (Business and Law)
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Quote paper
Max Adler (Author), 2010, A structural analysis of the German Web Design industry by using the model of Porter's five forces, Munich, GRIN Verlag, https://www.grin.com/document/150711


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