Porter`s 5 forces - 1131 Words

Porter’s Five Forces – Competitor Analysis Michael Porter’s five forces is a model used to explore the environment in which a product or company operates to generate competitive advantage. Porter’s Five forces analysis looks at five key areas mainly the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry (advantage). Michael Porter’s Five Forces: New Entrants Suppliers Industry competitors and extent of rivalry advantage Buyers Substitutes Overview of Porter’s Five Forces The Porter’s Five Forces model is an â€Å"outside looking in† business unit strategy tool that is used to make an analysis of the attractiveness or value of an industry structure. The Competitive†¦show more content†¦If the cost of switching is low, then this poses to be a serious threat. Here are a few factors that can affect the threat of substitutes: †¢ Buyer propensity to substitute †¢ Relative price performance of substitutes †¢ Buyer switching costs †¢ Perceived level of product differentiation †¢ Fad and fashion †¢ Technology change and product innovation The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker is likely to switch over to a beverage like tea because the products are so similar. †¢ If substitutes are similar, then it can be viewed in the same light as a new entrant. †¢ Consider technology substitutes (who would have thought that MP3 technology would replace tape CD’s?) Michael Porter’s Factor 5) Competitive Rivalry And last but not least, this describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from: †¢ Many players of about the same size, no dominant firm. †¢ Little differentiation between competitors products and services. †¢ A mature industry with very little growth. †¢ Companies can only grow by stealing customers away from competitors. For many industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivalsShow MoreRelatedPorter s 5 Forces Analysis879 Words   |  4 PagesIndustry Analysis Porter’s 5-Forces Analysis Porter’s 5 Forces Analysis demonstrates that Apple, as a company, has few forces against it. The few risks to the company are essentially negligible, and only offer medium risk. There is no real competitive rivalry to speak of as Apple is exclusive in it’s products, and cannot be re-created at this time. There are substitute goods available, but they do not match all of the specifications of a singular Apple product. Apple has also avoided price-basedRead MorePorter s 5 Forces Analysis Essay2049 Words   |  9 PagesPORTER’S 5 FORCES ANALYSIS: Overall, we found this to be an unattractive industry due to the following factors: Rivalry: The airline industry is filled with over 5000 airlines worldwide creating a considerable amount of competition. Initially, airlines would compete based on price, however, airlines such as the United Arab Emirates have begun to add unique amenities such as showers and Wifi to attract the wealthy, luxury seeking client. Moreover, despite Delta being one of the major airlines, thereRead MorePorter s 5 Forces Model1830 Words   |  8 Pages Porter’s 5-Forces Model identifies and analyzes 5 different competitive forces that shape the industry that a company is competing in and helps them determine weaknesses and strengths, which allows a company to tailor their business strategies to accommodate such problem areas. The model primarily deals with the threat of 1) competition, 2) new entrants, 3) substitutes, 4) power of suppliers, and 5) power of buyers. The threat of competition is pretty self-explanatory because it deals with theRead MoreMarketing Analysis Of Porter s 5 Forces1757 Words   |  8 PagesStudent ID: 1323086 Marketing IB2090 November 27, 2014 Marketing Essay The company has already acquired many companies to successfully extend its products and services offering. Porter’s 5 forces analysis is an important framework that helps understanding both the strength of the current competitive position and factors affecting the strategy development of the company. It tells us where the power dwells in the business situation. However, we will use the PESTLE analysis in this paper becauseRead MoreAnalysis Of Porter s 5 Competitive Forces Strategic Analysis834 Words   |  4 Pagesimpact. Porter’s 5 competitive forces Strategic Analysis Model was described by Michael Porter in 1979. Michael Porter with five structural unit’s characteristic of each industry, it describes a method for the formation of competitive advantage and long-term profitability of the goods, as well as the ways in which the company in the long run may retain its profitability and remain competitive. The nature of the relationships among these factors determining the competitive forces is best presentedRead MorePestel, Porter s 5 Forces, And Swot Analysis1459 Words   |  6 Pagespositioning of the organisation in the market, a situational analysis is conducted on the firm, describing its market and strategic strongholds, as well as weaknesses. For a clear explanation of the organisation’s situation, the PESTEL, Porter’s 5 Forces, and SWOT analysis will be conducted. It will provide a better understanding of the state of the firm, with a consideration of internal and external factors. 2.1 Pestle Analysis please see appendix 1 PESTEL analysis focuses on evaluating the externalRead MoreAnalysis Of Porter s 5 Forces Analysis On Fitness Industry1391 Words   |  6 PagesSingapore as the chosen country. The purpose of this report is to provide the PESTLE analysis on Singapore along with the Porter’s 5 forces analysis on fitness industry in the country, to understand how the company entered the industry’s market. The structure of this report will be as following; company background, country background, PESTLE analysis, Porter’s five forces, strategic recommendations, and the conclusion. COMPANY BACKGROUND Fitness First was born in 1993 in Bournemouth, Southern EnglandRead MorePorters Five Forces Model and Modern Applicability1288 Words   |  6 PagesPorter s Five-force Model and it s continued validity as a strategic management tool Porter s Five-force model is a theoretical guide to understanding the pressures that are felt by an industry, and by analogy, on a company. It can be used in such a way as to allow â€Å"the strategic business manager seeking to develop an edge over rival firms †¦ to better understand the industry context in which the firm operates† (Porter, 1999). The key to any successful (e.g. profitable) business venture is anRead MoreAutomotive Industry And Porter s Five Forces1368 Words   |  6 Pages Automotive Industry and Porter’s Five Forces Shawn D Schubach American Military University Abstract According to the AMA dictionary of Business and Management (2013), Porter’s Five Forces can be described as a â€Å"Framework developed by business professor Michael Porter for analyzing the balance of power within a particular industry and its profitability. The following are the five forces: Bargaining Power of Buyers, Bargaining Power of Suppliers, Competitive Rivalry in the IndustryRead MoreSituational Analysis1169 Words   |  5 Pages(The Times 100, 2009, p. 1). This paper will show the organization’s mission, vision, and values. In addition, this paper will show a consideration of broad environmental forces affecting the firm, and the potential for global expansion. Finally, this paper will show an assessment of industry structure using the Porter Five Forces Model, and a critical assessment of organizational SWOT (Strength, Weaknesses, Opportunities, Threats) factors. Mission, Vision, and Values â€Å"The IKEA vision ‘to create