Application of Product Life Cycle Concept to an Industry of Your Choice

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Five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. Michael Porter is a professor at Harvard Business School andis a leading authority on competitive strategy and international competitiveness. Michael Porter was born in Ann Arbor, Michigan. In his book on competitive analysis that many corporations rely on today. He defined competitive analysis as essentially a structured method of examining an organization or industry in order to provide a clear understanding of the factors that affect a business. The following diagram shows the five forces model of Porter: New Market Entrants, e.g.

* entry ease/barriers
* geographical factors
* incumbents resistance
* new entrant strategy
* routes to market
New Market Entrants, e.g.
* entry ease/barriers
* geographical factors
* incumbents resistance
* new entrant strategy
* routes to market

Supplier Power, e.g.:

* brand reputation
* geographical coverage
* product/service level quality
* relationships with customers
* bidding processes/capabilities

Supplier Power, e.g.:

* brand reputation
* geographical coverage
* product/service level quality
* relationships with customers
* bidding processes/capabilities

Buyer Power, e.g.:

* buyer choice
* buyers size/number
* change cost/frequency
* product/service importance
* volumes, JIT scheduling

Buyer Power, e.g.:

* buyer choice
* buyers size/number
* change cost/frequency
* product/service importance
* volumes, JIT scheduling

Competitive Rivalry, e.g.:

* number and size of firms
* industry size and trends
* fixed v variable cost bases
* product/service ranges
* differentiation, strategy

Competitive Rivalry, e.g.:

* number and size of firms
* industry size and trends
* fixed v variable cost bases
* product/service ranges
* differentiation, strategy

Threat of Substitutes, e.g.:

* alternatives price/quality
* market distribution changes
* fashion and trends
* legislative effects

Threat of Substitutes, e.g.:

* alternatives price/quality
* market distribution changes
* fashion and trends
* legislative effects

Michael Porter’s framework of competitive analysis is applicable to our business organization known as D.T.DOBIE TANZANIA LTD which falls under the automobile industry in Tanzania and worldwide in the following ways: A.Barriers to entry/threat of new entrants.

It's true that the average person can't come along and start selling brand new cars. The emergence of foreign competitors with the capital, required technologies and management skills began to undermine the market share of brand new car sellers. The following factors are barriers to automobile seller’s new entrants: * Knowledge and Technology

Ideas and knowledge of servicing its supplied products is the one that provides competitive advantage to D.T Dobie over others. D.T Dobie uses machines of highest technology on checking and servicing its cars in which, gives them power to provide guarantee of up to one year service to its product since they are assured of what they are doing. The machines used by the skilled labor of D.T Dobie to service and check the product are of high quality and they are very expensive in such a way that for new entrants firm in that business its an ownership barrier. * Access to distribution

The demand for brand new cars in Tanzania is very low since they are sold at price that individual can’t afford. D.T Dobie is a greater supplier of brand new cars to Tanzania government institution, most United Nations (UN) organizations such as UNICEF, ILO, UNESCO, representative’s offices in Tanzania and embassies offices. Since these agencies are the most buyers of brand new cars, it has made D.T Dobie to have almost...
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