Essay on Strategic Business Analysis: Porters Five Forces

Essay on Strategic Business Analysis: Porters Five Forces

Length: 1414 words (4 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

The forces driving the competition and the intensity of the competition in an industry, are due to its principal economic structure and the behavior of the competitors (Porter, 1998). Therefore, the state of competition as shown in Figure 1 depends on five competitive factors such as industry competitors - rivalry, potential entrants, buyers, suppliers, and substitutes. As Porter(1998) states “ the collective strength of these forces determines the ultimate profit potential in the industry, where profit potential is measured in terms of long terms of long run return on invested capital.”











Therefore, this chapter will focus on the strengths of the competitive forces that drive the organization towards industry profitability by the identification of the structural features of the industry.

1.1.1 Rivalry - Industry Competitors

When analyzing the market, it is understood that the customer plays a huge role and that there is a very low switching cost for the customer due to the very low number of competitors. Even though this is an opportunity to the company at times this opportunity can be a threat to the company. The threat is prevented by gaining the information regarding the customer’s needs and assuring the customer the products that are purchased are safe and ethical. Safety of products are an absolute requirement and that as Hayleys PLC(2012) states “every one of our customers knows that buying a Hayleys product means they are choosing to buy the most optimal combination of safety and efficiency.” The main communication method used to reach the customer is through advertisements and this reaches the customer in the most efficient manner that reaches the customers concerns.

The competiti...


... middle of paper ...


...s Five Forces), 24 July, [Online], Available: http://strategiccfo.com/wikicfo/threat-of-substitutes-one-of-porters-five-forces/ [21 December 2013].
PLC, Hayleys (2008) Business Superbrands, [Online], Available: www.superbrands.com/lkb1/pdf/hayleys.pdf [10 December 2013].
Porter, M. (1998) Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1st edition, New York: The Free Press.
Porter, M. (2008) 'The Five Competitive Forces That Shape Strategy', Harvard Business Review, January, pp. 1-17.
Rubinfeld (2000) 'Market Definition With Differentiated Products: The Post/ Nabisco Cereal Merger', Antitrust Law Journal, vol. 68, no. 1, pp. 1-10.
Wilkinson, J. (2013) Buyer Bargaining Power (one of Porter’s Five Forces), 23 July, [Online], Available: http://strategiccfo.com/wikicfo/buyer-bargaining-power-one-of-porters-five-forces/ [20 December 2013].

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

porters five forces Essay

- 4. Barriers to Entry When a business is profitable, it attracts potential entrants that desire to gain market share. In addition, it can negatively affect the existing firms' profitability. The probability that new companies will enter an industry depends on the extent to which barriers to entry have been build. In other words, existing firms in the industry set up multiple constraints to limit the number of potential entrants. Within the auto industry, the threat of new entrants is low, because of the substantial barriers to entry....   [tags: ]

Strong Essays
941 words (2.7 pages)

Market Environment And Porters 5 Forces Essay

- Market environment and Porters 5 forces Market environment: the market environment is considered an external environment because a business would have some control but not full control over this environment. It considers element outside the business. Elements considered would be Customers/ consumers, suppliers, intermediaries, competitors, strategic alliances, non-government organisations, industry regulators, community based organisations, trade unions and employer organisations and other organisations....   [tags: Management, Marketing, Entrepreneurship]

Strong Essays
1296 words (3.7 pages)

Mcdonalds Porters Five Forces Model Essays

- Analysing McDonalds (fast food outlets) using Porters 5 Forces model – sometimes called the Competitive Forces model. Introduction McDonalds Canada opened in 1967, thirteen years after McDonalds had taken the United States by storm. This was the first restaurant to be opened outside of the United States. It was in 1965 that McDonalds went public and offered shares on Wall Street. Since then it has been important for McDonalds to continually monitor its performance, to make sure it is competitive and profitable while also being aware of its immediate community responsibilities....   [tags: Strategic Management]

Strong Essays
1194 words (3.4 pages)

Essay on Porter 's Five Forces Analysis

- Section – 1 D Competitive Environment Porter 's five forces Porter 's five forces The confectionery industry is very dynamic in its nature. Things have changed within this industry very frequently before. According to (Porter, pp 4, 1985) “the collective strength of these five competitive forces determine industry profitability because they influence the prices, costs, and required investment of firms in an industry”. This model is one of the best tools available for analytical evaluation the competitive nature of the industry....   [tags: Porter five forces analysis, Management]

Strong Essays
954 words (2.7 pages)

Porters five forces Essay

- Michael Porter created the five competitive forces model in 1979. It is a tool used by strategist to manage the competition in the industry. It helps to identify the most competitive forces and formulate the appropriate strategy for the company. Company that intend to enter the particular industry may use this model as guidance to evaluation of the potential risks, opportunities, constraints and the roots of profitability. 1. Buyer Power There are two buyer categories in the automobile industry: final customer, the actual users of the end product and industry’s customer, manufacture company buying the necessary items from the supplier....   [tags: ]

Strong Essays
1521 words (4.3 pages)

Essay about Strategic Management : Strategic And External Environments

- Group 6 Strategic Management Strategic management is the process where organization managers reach the goals and aspirations of the organization on behalf of its owners. This is done through formulation and implementation of ways and methods to fulfill the organizational goals and objectives (Brian, 2011). This is done with in-depth consideration of both the internal and external environments that the organization operates in, in order to allow the organization make the right decisions. Strategic management is an important element that firms must put together through strategic thinking as well as strategic planning (Nag, R., Hambrick & Chen, 2007)....   [tags: Strategic management, Strategic planning, Strategy]

Strong Essays
3201 words (9.1 pages)

Questions On The 's Five Forces Strategy Framework Essay

- Quiz-4 Part A (maximum 2 paragraphs) • Pick a strategy framework that is widely used (you may pick one from those mentioned earlier.) • Provide a brief description of the components, or a diagram, of the framework. • Briefly describe underlying assumptions of the framework (economic/ cognitive/statistical…) Stratergy Framework --->Porter’s Five Forces Model-: Introduced Porter 's 5 Forces Model. The Porter 's Five Forces strategy framework helps understand where power lies in the business. It not only helps us understand the current position but also the position of the future....   [tags: Strategic management, Porter five forces analysis]

Strong Essays
1662 words (4.7 pages)

Porters Five Step Analysis of UMUC Haircuts Essay

- UMUC Haircut’s has been a successful organization for almost two decades, yet more recently there have been threats geared towards to the future and success of the business. I am writing this paper to inform Myra(Owner of UMUC Haircut’s) about the impactful forces aimed towards her business, along with a generic strategy to combat any known threats. Finally, I would like to propose which strategic business area needs improvement at UMUC Haircut’s. I plan to propose immediate action towards increasing brand exposure and customer information using an inbound marketing approach....   [tags: business, threat, customers]

Strong Essays
858 words (2.5 pages)

Essay about The Development Of Strategic Management

- Submitted By Drupal Kumar (20107471) Chandanbir Singh (20107185) Shefali (20107118) Submitted To: Armaan Verma and Swati Nanda Dey   Contents Role of Strategy 3 The Development of Strategic Management 3 Dynamics Capabilities Model 4 Methodologies that have been used 5 Competitive Strategy Model 5 Resource – based Model 7 SWOT Models 8 PEST 9   Role of Strategy Manager have to maintain and establish a match between the resource and environment to get good financial performance for firm or business and it is called strategy....   [tags: Strategic management, Management, SWOT analysis]

Strong Essays
1332 words (3.8 pages)

Essay about Strategic Planning And Human Resource Management

- Strategy Strategic planning means thinking and taking initiative steps and further implementing them for the better performance for the business. Strategic plan may vary according to different types of business and generally involves setting goal, allocating action to achieve goals and implementing resources to perform the actions. Role of strategy Strategy provides framework for making plans and further implementing them. The strategies should be understood by the managers and team members then they provide more effective decisions for the organisation....   [tags: Strategic management, SWOT analysis, Management]

Strong Essays
1595 words (4.6 pages)