Analysis Of Porter 's Five Forces Model

The short product life cycle in this industry requires competitors to continuously evolve. This continual innovation is difficult for new entrants to achieve. Also, existing products, such as Apple’s iPhone, have built brand loyalty and associated switching costs for consumers, which pose as barriers to entry for new competitors.

The Intensity of Rivalry among Competitors in an Industry (High): Equally balanced competitors exist within the industry such as BCF and KMD; these firms also face competition from retailers and wholesalers. The growth of the industry is relatively agile in both financial and technological aspects. The intensity or rivalry is further accentuated by relatively high storage and fixed rental costs, extensive product differentiation and minimal switching costs.

Bargaining Power of Buyers: The bargaining power of buyers is high in the department store retail industry. The volume of buyers is high, and buyers are very price sensitive in this industry. The products are not highly differentiated, and there are numerous stores that offer the same, or similar, products, giving buyers the opportunity to search for the lowest prices and information. The industry has substitutes available in the form of specialty, differentiated products and stores. This increases the power of buyers,

Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.

The bargaining power of suppliers; I believe the suppliers have a decent amount of bargaining power, due to the fact that they are the life line of the company. Without the suppliers there is no way a business such as this will survive.

Competition being one of the major issues that often must be addressed in the business world, it is important for a firm to learn on ways to reduce the impact of the competition. Competition is definitely an important factor in helping a business

The factors affecting the intensity rival in whom our company is competing are based on four of the competitive forces. The first one is the rivalry among competing firms. This is where our business is competing for customers, based on our quality, price and speed. During this factor we look at our competitor’s moves.

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

In this section we look at who are our competitors in the same industry and how can we gain the large portion of the market share and profits. However, if the level of competition becomes too high it can ultimately lead to a decrease in profits. There has been an increase in the amount of competitors on the tourism industry over the last 10 years, with the introduction of online sales and new airlines. For the tourism industry the level of competition can be quite high as

Threat of substitute products and services is the last of Porter’s Five Force Model. For Tesco, the threat of substitute products and services is medium. Switching costs may reduce the threat. Besides customers shop in physical stores they also can shop in online services wherever they are. Switching cost give every customers a good services, provide good quality products to all customers and also will the long-term contract with financial penalty will achieve.

Michael Porter expands in the analysis of many of these factors that affect competition in the industry, in order to reach a framework that helps to quickly identify the structural features that are critical to determine the nature of competition in a particular industry. The author concludes that the competitive strategy could be described as making offensive or defensive actions to create a position that could be defensible in an industry, and to deal successfully with the five competitive forces and thus achieving a higher return on investment for the

Competitions are ubiquitous. It may be in the form of us seeking a promotion at work, company competing for bigger market share. In fact, humans more often than not ,seek to achieve a superior position relative to others in a variety of contexts (Garcia, Tor and Schiff, 2013). Simply put, an undertaking with an aim of establishing gain by hindering the competitive edge of the rival party involved. In economic sense, in a marketplace, there are buyers and sellers for a product existing at variance, which would allow the price of products to change to counter the change in supply and demand. In todays times almost every product has a substitute alternative, hence, a buyer would have the convenience of switching to the cheaper alternative if price of a product becomes unaffordable for them. Hence, the buyers have relative influence on the price of the products. However in some industries there are only a few supplier of the products and services, due to the absence of substitutes, which reduces the bargaining power of the consumers on the price of goods, due to the producers having absolute power over the pricing of the goods.

In this paper, we are going to discuss Porter’s “six-forces model” and its effect in industries. With this model, companies can determine the attractiveness and profitability of a market and also determine its competitiveness. Companies need to develop strong corporate strategies in order to structure the six forces to their advantage and strengthen their market position. This model can add advantages or disadvantages to industries in competition depending on the situation. The model has its strengths and weaknesses, which are going to be discussed in depth in this paper. Porter’s “six-forces model” is structured as follows: first we have the horizontal forces which include threat of substitutes, threat of new entrants and competitive rivalry

I am a registered nurse employed in a hospital in the healthcare industry. Porter’s five forces model begins with the first force being the intensity of rivalry among incumbent firms (Parnell, 2014). Competition in healthcare, particularly hospitals, is limited. Due to the accredidation process, government regulations such as a certificate of need (Certificate of need, n.d.) and licensing of facilities and providers, competition is limited. The Federal Trade Commission (FTC) is looking at ways to increase competition in healthcare such as opening up opportunities for nurse practitioners, increasing the availability of such technologies as telehealth and establish more competitive healthcare pricing. In cities, there is more of a concentration of competitors. The hospital that I work at is the largest between Memphis and Nashville and has the busiest ER in the state of Tennessee. Therefore, the concentration of competition is low for that particular hospital. There are high fixed costs with a hospital such as buildings, overhead, equipment, and salaried personnel. Yet, a hospital does not cut their prices to increase patient census. However, it could be questionable in a low census period as to whether there are additional tests run or hospital admissions that would ordinarily not happen if the census were higher. There is strong growth in the healthcare industry with the industry growing at twice the rate of the national economy (Health Care Industry, 2012).