G4S Competitive Forces

According to “Management, 10th Edition” and Michael Porter’s model, when speaking in terms of competitive forces it should be viewed in five different areas; the first being the threat of new entrants. As for a company such as G4S Secure Solutions, the threat from new companies are pretty much non-existent. It being the top security firm worldwide, its threats comes from its larger competitors that are pretty much on their level and well established. Start-up security companies are challenged by the behemoths that dominate the market which are able to overshadow them by offering one stop shopping for multiple security needs.

Also the smaller companies have often been taken over by the larger companies. According to Security Guard Magazine (www. securitymagazine. com), two in 10 of guarding firms say they purchased another firm in 2002, while 10 percent say they completed the purchase of another firm in the first half of last year. New companies do not appear to pose a threat to G4S Secure Solutions as they are well established and far ahead of its established competitors. The second of the competitive forces having an impact on the company is its competitive rivalries. The biggest rivalry to G4S Secure Solutions is Securitas Security Services.

These two companies offer the same services and both also operate overseas which allows them to compete for business in the same markets. They often end up bidding against each other for contracts vying to provide the exact service for the least amount of dollars. Securitas Security Services entered the U. S. market in 1999 by acquiring Pinkerton and became the largest security firm in the world; they were already the leading protective service company in Europe. They have acquired numerous security firms; in one year alone they had acquired four firms.

With them continuing to grow in assets and size, they continue to prove themselves as the most formidable rivalry in this market. The threat of substitute products also has an affect on the company. The consumers are always looking for a better or less costly product that could provide the same service. Businesses are also looking for the next big thing to revolutionize the market. There are some substitute products that have an impact on the company such as guard dogs, security cameras, rolling shutters, security tags, and added lighting.

Guard dogs and rolling shutters eliminate the need for security officers altogether and they are a more cost efficient way to provide security. Department stores are now using security tags instead of officers; if someone leaves the store without the tag being removed it will activate an alarm at the door. Some people have the belief that just adding extra lighting to an area ensuring that it is well-lit can also deter burglars or criminals. Depending on the level of security needed, all of these products can be used as a substitute product.

As a competitive force, the buyer does not influence what the company sells, but the company has power over the buyer. This is a well established company that is known to provide top notch service; which also happens to be the top security firm. They do not have to continually lower their fees in order to attract customers. Their reputation is outstanding and many times, consumers may be willing to pay the extra dollars because they know they will be getting premium service with this company.

When it comes to G4S Secure Solutions the power is in the hands of the supplier; they have their reputation to go own as they easily have the ability to influence potential buyers. Their resume speaks for itself, the largest security firm, servicing more places worldwide than any other firm, possibly the best trained personnel of security firms, and more trusted by the most prestigious companies than any other security firm. With a background as such, G4S Secure Solutions definitely has the competitive edge when it comes to luring coustomers.