Using the Five Forces Model of Competition (Essay Sample)
Figure 3.3 in your textbook shows the analytical tool that aids in understanding the various competitive forces that affect strategic planning. Although all organizational sectors potentially face similar kinds of competitive forces, each sector and/or organization may face unique factors that affect competitive pressure at any given time, depending on varying circumstances.
In this forum, you need to locate two scholarly (peer-reviewed) journal sources that investigate any one element of Figure 3.3 from the perspective of organizations in the same sector. In other words, use research/scholarship that deals with one element from one sector. There may be some variance in the issues examined, and more than one organization may be involved, but both articles need to deal essentially with the same area of competitive pressure in the same sector of organizations. For instance, you may investigate “supplier bargaining power from foreign markets” or “dealing with emerging companies in the cell phone (or tech) industry.” Remember to use only scholarly articles (minimum two). However, three total scholarly sources are required with your post, so you may utilize your textbook as needed to support your informed assertions.
[Suggestion: You may want to know more about the developer of the Five Forces Model—Michael Porter, who is a premier strategy professor at Harvard. Check him out on YouTube.]
Instructions: Your initial post should be at least 250 words, and contain three scholarly citations/references (two from peer-reviewed journals).
Using the Five Forces Model of Competition
Market set up is comprising of five forces that determine the success/failure of any given company. The forces give a good outline of the feasible strategies a company needs to employ to outdo its competitors. According to Porter’s model, the five forces include:
The threat of new entrants
The risk of substitute products
Inter-competition between the companies in same industry
The threat of substitute products is a continuous force that has to be analyzed. An increase in alternatives increases the vulnerability of your market dominance (Hill, 2010). It gives your customers the option to choose from especially when there is a great price disparity. For example, in the telecommunication industry. With the entry of new mobile handsets, the older models are quickly losing value even when their prices are compared. Strategies must be employed to deal with this threat of substitute products (Orcullo, 2008). You could either conform to their standards or chant your path as a competitor. The crucial factors to consider when dealing wit...
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