Reflection Paper: Five Forces
a) Describe each of the five forces in two sentences.
(ア) Rivalry among existing competitors – It refers to the number and concentration of the competitors in a certain industry. Usually the growth rate of an particular industry will affect the pressure of companies in the same industry to fight for market shares (イ) Threats of New Entrants – It means the barriers of entry of those entities that would want to enter in the industry. It points that not only existing firms in the same industry pose a threat and there is a possibility that new firms entering the industry might pose a threat also. (ウ) Bargaining Power of Suppliers – An industry requires raw materials for it to be able to create its products. This pertains to the buyer-supplier interaction in the firms for it to meet the need of production in the industry. (エ) Bargaining Power of Buyers – This is mainly deal with the relationship between the firm in the industry and the customers/buyers of the product in the firm. It is how does the buyer create an impact to the firm and to the industry as well. (オ) Threats of Product/Service Substitutes – It mostly means that products from other industry might pose a threat to a firm’s product. However, the existence or non-existence of a substitute can determine the elasticity of demands for a certain product/service.
b) The most crucial, for me, is the rivalry among existing competitors. It is important to maintain the competitive advantage of a certain firm in order to stay at the top of the industry. Though that is what I think, it is also necessary to balance everything in order to position the firm to use its strengths to compete in the industry.
c) The five forces analysis questions the current position of the firm in the industry. Not only it assesses the position of the firm, it also evaluates the growth of the industry whether is it fast or slow. Five Forces Model doesn’t analyze the company but the industry and...
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