Identify an organization with which you are familiar and conduct a Porter’s Five Forces analysis.
What are the key success factors of the organisation identified?
Businesses worldwide experience some form of competition whilst operating in their respective industry. In the macro-environment there are factors that exist that can determine whether or not an organization gains competitive advantage or becomes viable. Michael Porter developed a Five Forces model to aid in analyzing the industry. These Five forces are:- •
Threat of entry
Threat of Substitutes
Bargaining Power of Buyers
Bargaining Power of Suppliers
A Porter’s Five Forces analysis is being conducted on Island Dairies Ltd a dairy company in Jamaica.
COMPETIIVE RIVALRY –
Competitive rivals are organizations who produce similar products and/or services who targets the same market.
THREAT OF ENTRY:-
This is dependent on the various barriers that exist when a firm is entering the industry/market. Barriers to entry are viewed as equilibrium adjustments that markets make. There are stiff requirements as to the production of certain products due to health regulations and requirements imposed by the Health Ministry (Government). These have to be adhered to before operation can begin. Also, the capital required to start such a business is very high as in order to commence production the organization will have to invest a lot in purchasing machinery and setting up a factory.
THREAT OF SUBSTITUTES:-
A substitute is referred to as a product produced by another company in another industry that can be used as an alternative. A threat exists when demand for a product is affected by the change in price of the alternative. For Island Dairies who produces cow’s milk if the price in a substitute such as Lasco Powdered Whole Milk is reduced then this will pose a threat to them as consumers will prefer to buy the cheaper of the...
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