Porters 5 Forces

Topics: Strategic management, Smartphone, Porter five forces analysis Pages: 3 (873 words) Published: May 1, 2013
Porter's Five Forces Model
Porter's five forces use for; to develop a wide and detailed analysis of competitive position (especially on industry level), while the determining and creating new strategies, planning, making investments or disinvestments for current or a brand new business or organization. (Businessballs, Michael Porter's Five Forces Competition Theory Model, 2009). Porter's five forces determined as;

“Supplier Power; Differentiations of inputs, supplier concentration, importance of volume to supplier, switching costs of firms in the industry, impact of inputs on cost or differentiation, presence of substitute inputs, threat of forward integration, cost relative to total purchases in industry” “Threat Of New Entrants; Economies of scale, access to inputs, government policy proprietary learning curve, absolute cost advantages, capital requirements, brand identity switching costs access to distribution, expected retaliation, proprietary products.” “Buying Power; Buyer volume, buyer information, buyers' incentives, bargaining leverage, brand identity, price sensitivity, threat of backward integration, product differentiation, buyer concentration against industry, available substitutes.” “Threat of Substitutes; Switching costs, buyer inclination to substitute, price performance trade-off substitutes.” “Rivalry among current competitors; Growth rate of industry, extent of exit barriers, amount of fixed cost, competitive structure of industry, presence of global customers, absence of switching costs, demand conditions.” (Management Study Suide, Porter's Fiver Forces Model of Competition, 2013. QuickMBA, Porter's Five Forces, A Model For Industry Analysis, 2010) In my opinion Porter's five forces are very useful not just in theory, also in practice. At present day, momentum of innovation is rapid and this speed of changes forces, existing companies on the market and new entrants to make quick decision. This speed can be fatal for the both sides and...
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