Analysis Of Porter's Five Forces Model

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Competition Analysis Porter’s five forces model analyzes the five competitive forces that shape every industry: intensity of industry competition, potential of new entrants into the industry, the power of substitutes, the power of suppliers, and the power of buyers. This model is used to identify an industry’s weaknesses, strengths, and general structure in order to establish a profitable corporate strategy that is perfectly suited for the industry. After analyzing the five forces that shape this industry, Foot Locker’s corporate strategy and business practices can be analyzed to see how the company is responding to industry trends and adapting to changing economic conditions. Furthermore, a SWOT analysis can be used to categorize these industry trends as either strengths, weaknesses, threats or opportunities for Foot Locker. Competition in the industry Demand for products in the shoe industry is largely reliant on disposable income and consumer confidence, and because of its strong reliance on consumer income, The Shoe Store industry was hit hard by the recession. During the recession, more price sensitive consumers sought out shoe deals from discount department stores and online shoe retailers. Now the economy is recovering and growing the Shoe Store Industry has done well. Since 2010, the industry has enjoyed an average annual revenue growth of approximately 3% (using 2014 projections). Despite its generally positive performance over the last five years, the Shoe Stores
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