Wednesday, 16 May 2012

The Sinestro Corps’ Industry Analysis: Porter’s Five Forces of Fear

Welcome back to Funding the Kryptonite, a blog that will take a look at comic book super villains and discuss them from a business perspective.

We go back to the Sinestro Corps and my overview of their organization. Previous posts about the Corps dealt with their recruitment/training and their succession planning. Today’s post is going to take a broad view of the Corps and the industry they operate in, using an analytical framework known as Porter’s 5 Forces.

Source: via David on Pinterest

Let’s Break Down The Five:
Porter’s 5 Forces is an analysis tool for an industry that looks at five key areas and tries to gauge the impact of each area on that industry. It does so by asking certain questions in each one. Let’s tackle that now:

Threat of New Entrants: How likely is it that other companies will try to move into this industry, or new companies form up in that industry? Important things to consider here include how easy it is to get customers to switch over to you, how much cost is associated with starting/entering this industry, and what are relevant government regulations, amongst other things.

Bargaining Power of Suppliers: How strong are the companies that provide you the materials you need to operate? Are there lots of little suppliers, a small number of powerful ones? Are their supplies extremely rare, or are there easy substitutes for them? Might they try to expand their own operations to start competing directly with you?

Bargaining Power of Buyers: How much leverage do the people who buy your product or service have? Can they easily jump to a competitor, or do you have them locked in? Could it be possible for the buyers to create their own company to provide the product/service and cut you out?

Rivalry Amongst Competing Firms: Is this an industry where each company has their slice of the pie and is happy with it, or is this a cutthroat industry where everyone is scrambling over each other for more market share? Can you easily get out, or are you locked in financially? How many competitors do you have, and how big are they?

Threat of Substitutes: Can firms in other industries produce products/services that can largely perform the same things as your offering?

In this particular case, we are going to narrow down the industry the Sinestro Corps operates in and label it as the “Fear” industry.

Fear Factors:
Threat of New Entrants: The Sinestro Corps is unlikely to have to be worried about new organizations sprouting up in the Fear industry. The cost of entering into the space is high, but in terms of getting the equipment needed (power rings and a central power battery) and the fact is that the existing Corps is very likely to just straight up kill you for trying. That being said, with the recent depowering of most of the Sinestro Corps and the creation of a new power ring/battery outside of Sinestro’s control, we will have to see how Arkillo handles his foray as a Fear entrepreneur.

Bargaining Power of Suppliers: There are two main components to a successful firm in the Fear business as far as supplier as concerned, the first being ambient fear and the second being a central power battery/power rings package. Fear is in abundance in the universe, provided freely by sentient beings across the stars so they have no bargaining power. The Weaponers of Qward, the group that first created Sinestro’s ring and subsequently those of his Corps, had extremely little bargaining power to start with and lost it all following their enslavement by the Sinestro Corps to produce the rings.

Bargaining Power of Buyers: The Fear business doesn’t really have any buyers per say, mostly recipients of their activities. From the perspective of individuals Corpsmen gaining a ring as “buyers”, their bargaining power is relatively minimal since, despite a high number of substitutes, the emotional connection required does tend to limit how easily one can switch over.

Rivalry Amongst Competing Firms: The Sinestro Corps has largely enjoyed a monopoly on Fear so far, with no competing firms in the same business space. Their decline has left Arkillo, former lieutenant of Sinestro, entering into the market recently in an entrepreneurial fashion. However, barring his continued activities once the Sinestro Corps reestablishes itself it is still not quite the same case.

Threat of Substitutes: In terms of general powers given to ringslingers, the Sinestro Corps faces heavy threat of substitution from almost every other Lantern Corps save perhaps the Orange Lantern Corps (due to their particular issue of only have one ring wielder). It has been shown that select people can use rings from multiple Corps, even simultaneously, and there have been documented cases of Sinestro Corpsmen switching to a different Corps. So this is a big threat.

Source: via David on Pinterest

Closing comments:
Similar to the VRIN analysis, Porter’s Five Forces is not the be all/end all of analysis tools. It’s just another element in the overall toolbox of analysis and should be combined with many others to provide a complete portrait of a particular company and the industry it operates in.

While I’ve provided what I believe are accurate pieces of information for each of the five areas of Porter’s framework, I have not given the key inferences and takeaways from them. I invite you all to post your comments on it, either challenging the descriptions or providing your views on what someone looking at that information should take away from it.

I felt fear. And I was blinded by its brilliance. I believed fear to be part of the chaos I abhor, but it was more controlling than all the willpower in the universe.” –Sinestro (Green Lantern: Sinestro Corps War Special)
Thank you for reading and please hit me up with your comments.

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