Porter's Five Forces Of Strategy Essay

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. If this is done and applied then the recourses can applied where they are required more. For e.g.- if a company has to update the software of their product then they have to focus on
If there are more competitive rivalry there will be a more pressure on price, profit, and strategy. Competitive rivalry may be high due to the similar companies operating in one business, may be they have same strategies to market their product.
Threat of new entrants:-
The competitive threat is not only from the competitors which exist in the market but also from those which are potential new entrants into the market place. The few reasons for barriers are as follows: - high initial investment needed for to entry the business, high switching costs for consumers, difficulty in accessing the raw materials.
Threat of substitutes:-
Threat of substitutes means the substitute product is those that are in another industry but they are used to fulfil the same need as the substitute product fulfil. The few factors which affected the threat of substitutes are as follows: - brand loyalty, relative prices and so on.
Bargaining power of buyers:-
Bargaining power of buyers means that the buyers have the more power to affect the price in the industry that will become an important for consider to the