Porter’s Five Forces Analysis for Stronghold Armory Indoor Firing Range
Arizona is a state with a population that loves their firearms. This love of firearms has led to a growing population of firearm owners and enthusiasts. There currently is a gap in the market for a location to support these enthusiasts with an indoor firing range. Upon market researching in Sierra Vista, many people are looking for a business to meet their needs for an indoor firing range. The needs that the customers are looking for availability and climate control.
Cochise County is in the Arizona high desert. With temperatures reaching in the triple digits for most of the late spring and lasting until early fall, an indoor firing range would be a business for customers to safely utilize firearms out of the weather. There are currently firing ranges in Tucson, Arizona that offer meeting those needs, but customers must spend a large portion of a day to travel to and from the range. Stronghold Armory will be able to overcome this deficiency in the local market.
Sierra Vista is the largest town in Cochise county located in southeast Arizona. Cochise county has a military base (Fort Huachuca), a thriving tourist economy from the town of Tombstone, and the wine country of Elgin (both located less than 30 miles from Sierra Vista), and several law enforcement agencies.
This Porter’s Five Forces Analysis will review the Competitive Rivalry, Supplier Bargaining Power, Buyer Bargaining Power, Threat of Substitution, and Threat of New Entrants that would affect the proposed venture of Stronghold Armory Indoor Gun Range in Sierra Vista, Arizona.
Competitive Rivalry: Low
- No Local Indoor Ranges
- Only Two Outdoor Range with Limited Schedules / Hours
As mentioned above, there is no local competition for an indoor firing range within an hour and a half of driving. There are currently only two firing ranges within a twenty-minute drive. One is on the military reservation and only operates from 9 AM to 4 PM on Saturdays and Sundays that are not holidays. The other range is out in the country and is only five days out of the week, with Monday and Thursday closed, and the hours range from 12–5 PM or 8 AM – 5 PM.
Supplier Bargaining Power: Moderate
- Limited Local Suppliers
- Online Suppliers
Sierra Vista is not in a large metropolitan area. There is not a lot of suppliers local that offer materials that would be needed for an indoor range. There are retail stores that offer materials of ammunition, targets, and normal supplies needed for any business. The main issue for local suppliers, no supplier offers bulk purchasing. Local suppliers would only be used for stop-gap purchases when supplies are needed before materials are delivered from online purchases. With the use of online suppliers and straight to business delivery, the main source for materials used for the business will be ordered online. By having the needed federal firearm licenses ordering bulk ammunition will not be an issue. There are many online suppliers to choose from and this fact will offer the ability to shop for the best supplier that will be able to supply the materials needed.
Buyer Bargaining Power: Low
- No Local Providers of Similar Services
- Local customers, transient military customers, and tourism customers.
The way that Stronghold Armory will combat buyer power is by offering services that will attract customers that are not only local, but customers that from the tourism industry and the transient military students from the Army Base. Stronghold Armory will value the local customer, but with the transient military students and tourists, the business will not have to rely solely on them. By not giving the local customer base full control of the livelihood, the Stronghold Armory will maintain much of the buyer’s bargaining power.
Threat of Substitution: Moderate
- Local Outdoor Ranges
- Not Using A Range for Services
For any business, there are two forms of substitutions; other businesses or nothing. Fortunately, there are no other businesses that will offer what Stronghold Armory will offer as an indoor range. There are outdoor ranges that some customers, which would naturally be drawn to Stronghold Army, might use if the price point is lower and the climate is agreeable. The final form of substitution is the choice of not going to a range. There is a sizable amount of open land surrounding Sierra Vista. This open land offers would-be customers the option of shooting firearms out in the country without having to pay for services. The final variable in substitution is for potential customers to choose to just not visit any firing ranges. A firing range is a service business, and most service businesses afford their customers’ convenience that is a luxury and not a necessity. Most of the general public does not need to frequent a firing range other than by choice of entertainment. And if the price point for the market is not agreeable, then the customer base will choose not to frequent that establishment.
Threat of New Entrants – Low
- Cost of Entry Is High Which Deters Competition
The threat of new entrants is relatively low. The market is relatively small for firing ranges because of the costs due to facilities and licenses. The cost of outfitting an indoor firing range is almost three times the cost of an outdoor range. The price to ensure that the customers and the general public are safe is the greatest expenditures in establishing an indoor firing range. Bullet stops, ballistic materials, and ventilation that are used indoor, that are not used in outdoor firing ranges account for the largest price difference in establishing an indoor firing range.