7. How do the competitive forces in Porter’s five forces model affect the profitability of the overall industry? For example, in what way might strong forces increase industry profits, and in what way do strong forces reduce industry profits?
Why is it important to study the internal resources, capabilities, and activities of firms? What insights can be gained?
Michael Porter has defined five forces which define the
profitability and long going of any company or industry. The impact
of those powers on the company or industry is analyzed. If the
impact is low then the company will be very profitable and if the
impact is high then profit profitability will be affected.
Negotiations power of the buyer- If the impact of this strength is
strong then the company will have a disadvantage. The buyers have
plenty of options to choose from hence the profitability of the
company is reduced. They need to take more actions to attract the
customers and fulfil their desires otherwise rivals can definitely
fulfil.
Bargaining power of suppliers- If the impact of this force is high
on the company then buyers will have negotiation power. It means
they will charge the cost of raw material as per their decision. So
the company will tend to purchase the raw material at a very high
cost. So if the impact is low then the company has various options
to choose from and hence will procure the raw material at lower
cost and hence profitability will be increased.
The example is Intel Corporation. The company needs sand for its
processes which are very readily available from plenty of
suppliers. So the company has options to choose from hence getting
the sand at lower cost increasing the profitability.
The threat of substitution - When there is a threat of substitution
then the company has to be ready for the substitution. So it has to
invest cost into it. Because of that profitability hampers. Because
if the substitute comes into the market then the company has to be
available to tackle that substitute otherwise it will lose the
market share.
A threat of new entry - when the entry barriers are low then the
new company may enter into the market and start offering the
product or services. Because of that, the company has to invest
heavily in customer relationship management to maintain the long
term relationship with them. Otherwise, the customers will select
the new company and profitability will be hampered.
Competitive rivalry - if the competition among the existing rivals
is very high then the company has to offer is the product at a very
competitive price. So the price has to be reduced and hence
profitability decreases. When the rivalry is not there or the
company is dealing into blue ocean strategy then the company may
increase the price of a product and earn margin and profitability
as well.
So because of these reasons five forces model affect the
profitability of the overall industry or company.
The internal resources, capability and activities of the firm have
to be studied. Because the competitive advantage is generated by
the resources, a capability is activities. If the resources are
plenty in quantity then definitely the company is going to have a
competitive advantage because resources are very crucial for any
company. It may be the product, raw material, human resource or any
other resources. The company should identify the capabilities and
execute the same. The under execution and over execution both the
conditions are not beneficial for the company. So the correct
capability should be executed. If we talk about sights then the
company can get its qualities, attributes, shortcomings and
strengths and hence it can work accordingly.
7. How do the competitive forces in Porter’s five forces model affect the profitability of the ov...
Consider how Porter’s Five Forces apply to Uber’s business/industry. (Porter’s Five Forces is at an industry level). Pick one force and describe how you believe it impacts Ubers’s profits, favorably or unfavorably. What could Uber do to more favorably position itself for sustained economic profit over the next five years?
Read “Better World Books and the Triple Bottom Line” 1. Conduct a Porter’s five forces analysis of the used book industry. Is this an attractive industry? Why or why not? Which force(s) have the strongest influence? (200 words minimum). Please include a word count of your answer. 2. What are BWB’s resources and capabilities? Do they lead to a sustained competitive advantage (Hint: apply the VRIO analysis)? (150 words minimum). Please include a word count of your answer.
Porter’s Five Competitive Forces model. Use the search term “information sharing in a supply chain” to find 2 peer-reviewed articles from academic journals about the use of information in supply chains or value chains. Write a summary of each article and explain how the use of information in each article relates to Porter’s Five Competitive Forces model. Discuss how information can be used strategically, based on the example(s) in the articles. Your paper should be in APA format and 3-4...
One of the most popular frameworks for examining a firm's competitive environment is Porter's Five Forces, also known as the Industry and Competitive Analysis. As Porter puts it, "analyzing [these] forces illuminate an industry's fundamental attractiveness, exposes the underlying drivers of average industry profitability, and provides insight into how profitability will evolve in the future." Use the five forces model to illustrate competition in the newspaper industry. Are some competitors better positioned to withstand this environment than others? Why or...
Using Porter’s model of competitive forces discuss how a wholesale, Sefalana (Pty) Ltd can conduct situation analysis to determine the competitive structure of the retail industry in the new markets.
Using Porter’s Industry Competitive Model, what forces are determining long-term industry attractiveness in the self-driving car marketplace? Discuss in depth.
Examining Business Strategy and the Five Forces Model: The Challenges Facing eBay; Time for Changes in Strategy? 1. First, research and create a Porter’s Five Forces Model of eBay in Word, Excel, or PowerPoint format. Use external sources to assist in populating your model. Next, report and analyze your findings, touching on the following questions: 1. What does your five forces analysis reveal about the nature and strength of the various competitive pressures eBay faces? Are the competitive pressures facing...
A) Please apply porter’s five forces model (particularly focusing on customers and suppliers) to analyze Airbnb’s external environments, and evaluate Airbnb’s future value. B) Please identify the nature of the industry of Airbnb. Is this a “neutral platform” to connect hosts and guests or is this a “rental business model” which outsources housing properties and risks? Plz read and answer the question correctly, and do not copy the answer from somewhere or answer different thing.Thank you so much.
Use the five competitive forces model as described in this chapter to describe how information technology might be used to provide a winning position for each of these businesses: A local restaurant A mobile applications provide A web-based audio book service *****Porter's five forces include three forces from 'horizontal'competition--the threat of substitute products or services, the threat of established rivals, and the threat of new entrants--and two others from 'vertical' competition--the bargaining power of suppliers and the bargaining power of...
Tell me wether each statement is true or false: 1.Factors that cause the rivalry among competing sellers to be weak include low buyer switching costs and rival sellers that are relatively equal is size and capability. 2.High labor productivity (especially if the production process has high labor content) is a good example of a manufacturing-related key success factor. 3.Whether the company’s sales are growing faster, slower, or about the same pace as the industry as a whole, thus resulting in...