Case Study Of Michael Porter's Five Force Model

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Michael Porter’s Five Force Model The Five Force framework was developed to help companies analyze an industry’s competitiveness. The model briefly outlines the five forces that have a direct impact on UniCal, its competitive actions and movements. • Rivalry – Firms strive for competitive advantage over their rivals. All offer similar products and services, but their competition is focused primarily on price, meeting the minimum specifications and delivery time. Competition is fierce in the government procurement industry and all employ a low-cost strategy with no product differentiation in many cases. Government agencies are not loyal so each competitor has the ability to take accounts away from each other. Top Competitors 1. Bob Barker Company, Inc. – Estimated Annual …show more content…

• To determine the change in profits in submitting a bid when purchased product prices are altered, which will adjust contributed profits. • To determine the amount of losses that could be sustained if the business suffers a sales downturn. The approach to understanding a breakeven at UniCal is to first understand the sale process of the business and costs associated to operate the company. Using the average monthly cost from the January thru October 2015 financial statements, UniCal had a monthly fixed costs of the following: In addition to the monthly fixed costs of $92,169, UniCal expensed a monthly average of $24,204 for incentive payments and $26,975 expensed for freight, duty, storage, etc. costs, resulting in a gross monthly total of $143,348. The total of these average annualized monthly costs is estimated to be $142,748 going forward to support annualized monthly revenue of $874,544. The average monthly cost of purchased vendor product for our calculation is $ 719,402, therefore, the average net monthly sales is

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