The 5 Competitive Forces That Shape Strategy Research

THE 5 COMPETITIVE FORCES THAT SHAPE STRATEGY
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Summary
Porter uses this article to demonstrate the how the five forces can competitively shape the strategies used in business (2008). The five forces are essential because they help businesses determine and enhance their long-run profitability in any industry (Porter, 2008). The five forces analysis can be easily put into practice by organizations with the aim of ensuring that the profit structure is monitored based on its economic value. The five forces include; rivalry among existing competitors, the power of suppliers, the power of customers, the threat of new entrants and threat of substitutes.
All these factors may drain the economic value of an organization and hence the need for them to develop strategies that will strengthen their defense against these competitive forces (Porter, 2008). Because of these forces, the fast growing industries are not always the best for building profitabl...