Porter's Five Competitive Forces

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In order to assess the potential for profit in any industry, Porter's Five Forces analysis can be applied as an important tool. Following in an analysis of Google looking at the strength of five important forces that affect competition: •Supplier Power: Currently Google is prevalent regionally although it is used globally. For example, China restricts what Google can provide to the citizens of China. Google has a consistent income through its advertisement power where the consumer and organizations selling products, both feed into Google. For this reason, as long as Google is dominant, the supplier bargaining power will remain low. •Buyer Power: The main revenue for Google is the advertisements and organizations (big and small) currently compete to link their advertisement to popular key words in order to reach consumers. As long as the demand is high from both the consumers and organizations, the buying power will be low. However, more and more consumers seem to want other services for free currently. •Competitive Rivalry: The competitive rivalry in the industry is fierce and Google currently faces this from Microsoft and Yahoo. Both of these companies offer search engines for free and Google has to constantly improve the search engine features to stay on top of the competition in order to keep the consumers' interest. •The Threat of Substitution: The extent to which other search engines can be used if Google consumers are not satisfied is high. However, technologically, Google currently offers the most sophisticated way to search information. As long as this prevails Google will flourish as the go to place for consumer searches. •The Threat of New Entry: The potential for new entry threat is high with Yahoo and Microsoft constantly improving their search engines to surpass Google. Although, Yahoo and Microsoft have not succeed to surpass Google, the potential threat of that happening exists. Also, there may be legislative watch over the search engines...
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