Pestle and 5 Forces Analysis

Topics: Strategic management, Management, Value chain Pages: 8 (2214 words) Published: November 26, 2011
Glanbia plc is an international dairy, consumer foods, and nutritional products company. The Company conducts operations primarily in Ireland, the United Kingdom, and the United States.

Hi Tom below are the necessary informations about the project work. This is the part 1 due for monday.

The Industry is Glanbia The industry analysis Using
rivers of Globalisation, PESTEL and Five Forces Your report should start with "The (your industry) is becoming more competitive due to

Main reason 1

Main reason 2

Main reason 3 etc

Having outlined the major reasons why your industry is becoming

more competitive then explain each reason using academic argument and industry facts to support.

For instance, if one of your main reasons is say "Increasing Power of the Buyers" then you could use issues such as many alternative suppliers, growing concentration, increased "shopping around" etc. If buyers are becoming more powerful then a useful supporting fact might be a reduction in market prices

maximum 4 pages

My part in this is to examine=
the strong Legal influence, Suppliers power {of Glanbia in a dairy industry} and all other conditions that is having an impact on Dairy industry {Glanbia

Pls if there anything that is unclear, pls do let me know

Thanks a lot Prince

1 Porter's 5 Forces & Industry Structure

What is the basis for competitive advantage?

Industry structure and positioning within the industry are the basis for models of competitive strategy promoted by Michael Porter. The “Five Forces” diagram captures the main idea of Porter’s theory of competitive advantage. The Five Forces define the rules of competition in any industry. Competitive strategy must grow out of a sophisticated understanding of the rules of competition that determine an industry's attractiveness. Porter claims, "The ultimate aim of competitive strategy is to cope with and, ideally, to change those rules in the firm's behavior." (1985, p. 4) The five forces determine industry profitability, and some industries may be more attractive than others. The crucial question in determining profitability is how much value firms can create for their buyers, and how much of this value will be captured or competed away. Industry structure determines who will capture the value. But a firm is not a complete prisoner of industry structure - firms can influence the five forces through their own strategies. The five-forces framework highlights what is important, and directs manager's towards those aspects most important to long-term advantage. Be careful in using this tool: just composing a long list of forces in the competitive environment will not get you very far – it’s up to you to do the analysis and identify the few driving factors that really define the industry. Think of the Five Forces framework as sort of a checklist for getting started, and as a reminder of the many possible sources for what those few driving forces could be.

Porter's 5 Forces - Elements of Industry Structure (source: Porter, 1985, p.6)


How is competitive advantage created?

At the most fundamental level, firms create competitive advantage by perceiving or discovering new and better ways to compete in an industry and bringing them to market, which is ultimately an act of innovation. Innovations shift competitive advantage when rivals either fail to perceive the new way of competing or are unwilling or unable to respond. There can be significant advantages to early movers responding to innovations, particularly in industries with significant economies of scale or when customers are more concerned about switching suppliers. The most typical causes of innovations that shift competitive advantage are the following:

• new technologies
• new or shifting buyer needs
• the emergence of a new industry segment
• shifting input costs or availability
• changes in government regulations

How is competitive advantage implemented?...
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