Porters Five Forces

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Running head: The Theory of Porter’s Five Forces

Porters Five Forces
Kimberly S. Lawson
1018525
American Military University
04 October 2012

Abstract

Michael Porter’s Five Forces model is a very sophisticated theory for calculating a company's economical standing. Michael Porter established a structure that shapes a structure that monitors an industry and is often used in strategic planning. Porter's detailed five forces model is one of the most frequently used business strategy tools and additional ease and effectiveness to havemany situations within in America and within global businesses.across businesses around the world.

Assessing Porter’s Five Force’s
Michael Porter established a structure that develops a corporation as being subjective by the five forces. The tactical business manager in search of developing an advantage over competitors can employ this structure to gain a better understanding of the industry perspective on which the company operates. The Porter’s Five Forces model is a straightforward but a vigorous instrument for understanding where the power is controlled in any business condition. This is very helpful to assist each business to understand the strengths of the current economical position and the strength of the position your the organization is considering for your company’s future. ("Porter’s Five Forces, ")

With comprehensible knowledge of where power and control exists, as an organization you can align your agency and take the competitive edge over the competitors in a position of strength while improving your agencies position of weakness, and avoiding miscalculated risks. ("Porter’s Five Forces,”)("Porter’s Five Forces, ")

Porter's Five Forces Analysis is a critical instrument for evaluating the potential success in an industry. With insignificant modifications, it is also beneficial as a means of calculating the balance of power in more general situations. It works by looking at the strength of five important forces that affect competition:

According to Porter’s Five Forces explains five significant influences that drive the competitive strength in most business situations: ("www.oup.com," 2007) • Supplier Power- how easy it is for suppliers to drive up prices. ("www.oup.com," 2007) • Buyer Power - The power of your customers to drive down your prices. ("www.oup.com," 2007) • Competitive Rivalry: The strength of competition in the industry. ("www.oup.com," 2007) • The Threat of Substitution: The extent to which different products and services can be used in place of your own. ("www.oup.com," 2007) • The Threat of New Entry: The ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down). ("www.oup.com," 2007)

Porter's Five Forces Analysis is a critical instrument for evaluating the potential success in an industry. With insignificant modifications, it is also beneficial as a means of calculating the balance of power in more general situations.

If this strategy is accurately implemented, Porters Five Forces will regulate a company’s company’s bbetter comprehension of the elements at work in the industry and promote a better understanding with the company’s management strategic vision on the elements that need particular concentration in the progression of their international strategy. ("Porter’s Five Forces, ") , at work to facilitate and promote the company’s management strategic vision on the force and that require special attention in the development of their international strategy.

Accordingly, this five-force framework, if correctly applied according to Porter’s prescript, should help a company to better understand the forces at work in that industry and also assist in focusing the company’s management strategic vision on those forces that require special attention in the...
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