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<p align="justify">Gree Electric Appliances is a Chinese electric appliance Manufacture headquartered in Zhuhai, Guangdong province in China. The company was established in 1991. The company started as a residential air-conditional manufacturer. It caters to 7 different consumer markets: residential air conditioners, commercial air conditioners, home appliances, refrigerators, and mobile phones (Global Gree, 2021). It is well known for its air conditioning solution; few projects include Soccer Stadium 2010 South Africa, Tehran University, and National Bank of Bulgaria (Global Gree, 2021). Gree is one of the biggest electronics manufactures in China. Porter&#8217;s five forces model is used to identify threats and business opportunities faced by China.</p>
<h2>Competitive Rivalry in the Market</h2>
<p align="justify">Chinese region is home to multiple leading electronic conglomerates. The electronic appliance industry is multiplying in this region of the world for the last two decades. The electronics industry in this part of the world is saturated and very competitive products. Its main rival is local companies Haier and Midea. Haier generated a revenue of $10.981 Billion (Nikkei Asian, 2021) with a profit of $2.432 Billion (Nikkei Asian, 2021) in 2019. For the same period, Midea posted revenue of $41.178 Billion (Nikkei Asian, 2021) with an income of $3.944 Billion (Nikkei Asian, 2021). The annual revenue of Mitsubishi Electric, as compared to its rivals, was $28.794 Billion (Nikkei Asian, 2021), with an income of $8.010 Billion (Nikkei Asian, 2021). The competition is increased recently to new heights due to the saturation of products in the region and worldwide. Chinese companies in the region are developing new electronics products and posing new challenges to well-established companies.</p>
<h2>Threat of Substitutes</h2>
<p align="justify">The threat of substitution is high when there are alternative products available in the market. The electric industry evolves with the need of time. The companies keep on innovating new technology to bring new products for the customers. Gree is investing a lot of capital in establishing research and development centers in the world. It has set up over six institutes, 52 research centers, and 570 labs globally (Global Gree, 2021). Now it is leading the change by making eco-friendly products. Consumers are testing the products against the strict benchmark of efficiency. They are the frontrunner in the industry, which keeps them ahead of their rivals. The threat of substitution is moderate shortly, but local Chinese companies can pose a higher-level threat in the long run.</p>
<h2>The Threat of New Entrants</h2>
<p align="justify">The threat of new entrants is medium for now, but the electronic industry threat is always there because of the evolving technology. The cost of entry into the industry is low, and the profit margin more than the investment, which paves the way for the new entrant. The latest entrant can bring the better product which is technological advance to disrupt the market leader. It can increase the competition in the market, resulting in a decline in the profit margin for the industry leader. New entrants can force the existing firms to be more effective and efficient. It forces them to explore the new business channel (Oregon State, 2021). The customer&#8217;s loyalty can restrict the new entrants from getting easy access to the clientele. Gree can keep its clientele by innovating new products and quality products. The threat level is medium at the moment.</p>
<h2>Bargaining Power of Buyers</h2>
<p align="justify">The buyer’s power is high in this case. The consumer holds power when there is plenty of available options in the market, and they can switch easily. (Martin, 2019). They can impact the companies’ bottom line by driving down the selling price. The deciding factor for any consumer is cost and efficacy. In electrical home appliances, efficiency leads to price, and the product must be efficient and reliable, which paves the way for buyers to hold the bargaining power. There are plenty of electric appliances companies, and you can find alternative products very easily. It increases the competition between the industry and decreases the price for the buyer. The buyers can switch between the products easily. To compete in this business environment, companies should keep their quality at best but keep their price as low as its rival. If they can do it, it will provide them business safety in the market. The buyer power is higher because of the market saturation and availability of the product.</p>
<h2>Bargaining Power of Supplier</h2>
<p align="justify">The major suppliers in the electrical equipment industry are providers of raw materials. The raw material used in the industry is of various types. The sector is horizontally integrated. The supplier can exert its power if its future is integrated with the company and there are other options available for its supplies (Porter, 1979). Companies have multiple suppliers around the world. The quality of raw material also dictates the bargaining power. Companies don&#8217;t change suppliers mainly because of the integration cost and the quality of the product. Suppliers can use these factors for bargaining and can reduce the overall profit of the company. In that case, the market is already saturated with producers. The region is saturated with the Electronic Industry. It provides an extra edge to the supplier. The supplier holds significant bargaining power in this case.</p>
<h2>References</h2>
<p style="text-align: left;" align="left">Global Gree. (2021). Products Services. Available at: http://global.gree.com/ywb/productsservices/residentialairconditioner/guaji_e/index.shtml<br />
Global Gree. (2021). Reference Projects. Available at: http://global.gree.com/ywb/productsservices/residentialairconditioner/guaji_e/index.shtml<br />
Global Gree. (2021). R&;D Strength. Available at: http://global.gree.com/ywb/aboutgree/rdstrength/index.shtml<br />
Oregon State. (2021). Strategic Management. Available at: https://open.oregonstate.education/strategicmanagement/chapter/3-analyzing-the-organizations-microenvironment/<br />
Nikkei Asian Review. (2021). Consumer Durables – Haier Electronics Group Co., Ltd. Available https://asia.nikkei.com/Companies/Haier-Electronics-Group-Co.-Ltd<br />
Nikkei Asian Review. (2021). Consumer Durables – Gree Electric Appliances, Inc. Available https://asia.nikkei.com/Companies/Gree-Electric-Appliances-Inc.-of-Zhuhai<br />
Nikkei Asian Review. (2021). Consumer Durables– Midea Group Co. Ltd. Available https://asia.nikkei.com/Companies/Midea-Group-Co.-Ltd<br />
Porter., E. M (1979) How Competitive Forces Shape Strategy. Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy<br />
Martin., M (2019) How Porter&#8217;s Five Forces Can Help Small Businesses Analyze the Competition. Available at: https://www.businessnewsdaily.com/5446-porters-five-forces.html</p>
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