Topics: Strategic management, Porter five forces analysis, Competitor analysis Pages: 4 (1055 words) Published: May 11, 2010
Michael five forces model

Rivalry among competing Firms: this is usually the most powerful of the five competitive forces. The strategies pursued by one firm can be successful only to the extent that they provide competitive advantage over the strategies of other firms (Grobler 2009) Due to China’s incredibly high FDI rate, more and more companies are investing into Chinese businesses and strengthening them in both their domestic markets and also on the global front. With the ever increasing growth of their domestic markets it will only be a short while before they become the dominant market leader, if in this span of 30 years they could rise from nothing to 4th largest in the world then it shows what impact they really had and still have on the global economy. Potential entry of new competitors: whenever new firms can easily enter a particular industry, the intensity of competitiveness among firm’s increases. When new firms become strengthened through investments, they become direct competitors of the leaders in that industry. e.g. A new Chinese innovation in the television industry grows rapidly, they will be direct competitors against any television firms based in China, for example LG and Sony Bargaining power of consumers: when consumers are concentrated, large or buy in volume their bargaining power represents a major force affecting intensity of competition in an industry (Grobler 2009) This goes for actual customers(public) and b2b businesses, because those that buy the larger quantities would get the cheaper rates no doubt, however in China how will that be decided? Will it be their size, market share, sales or Return on capital employed. Potential development of substitute products: in many industries firms are in close competition with producers of substitute products in other industries. As mentioned throughout this article, the Chinese have the ability to imitate anything, this factor will never disappear especially if Chinese firms...
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