The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps to understand both the strength of current competitive position, and the strength of a position which is considering to moving into.
With a clear understanding of where power lies, it helps to take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit.
Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations. FROM GREEN KATA...................
Facing these forces, Soundbuzz were quick responsive since the beginning of their business. For example, Soundbuzz had to face various situations in terms of customers. In the beginning, Soundbuzz had B2C business structure where they promote and sell the music on line to their customers. But soon the changing technology change the pattern of music business as peer to peer network got huge popularity. People like to get free music downloaded from this cloud network and Soundbuzz looses their margin quickly. In respond to this crisis they set up a new B2B business model and make other business as their customer. Soundbuzz started to provide to HP's digital music service, they provided new MP3 format music, developing software for integrated music entertainment etc. Soundbuzz also launched new Micro-payment billing system which makes their customers pay more easily. Finally they re-launched their B2C model again and started a digital music retail strategy in Asia Pacific.