Competitive Forces : The Competitive Force

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Competitive Forces. The competitive force is a system to understand an industry by examining the interactions among competitors in an industry or non-profit sector: potential new entrants, substitute offerings, suppliers, and buyers to the non-profit sector (Ketchen & Short, 2015, Section 3.1). To help analyze the forces a professor by the name Michael Porter developed a popular analytical tool used in the business world to identify how much profit potential exists in an industry (Ketchen & Short, 2015 Section 3.1). In Figure #: Competitive Five Forces, is a model for the analytical tool that reveals the component of the threat of new entrants, threat of substitutes, bargaining power of suppliers and buyers, and rivalry are rated on a scale of low-to-high to show the impact of the competition within the warm water therapy industry is and how KAA functions in the industry. Threat of New Entrants. New entrants into the industry are firms that do not currently compete in the industry but may in the future (Ketchen & Short, 2015, Section 3.3). New entrants have a tendency to reduce potential profits of an industry by increasing the competitiveness, which could reduce the quantity of clients that organizations rely on to visit its operation. According to Ketchen and Short new entrants can be “start-up” companies created by entrepreneurs, foreign firms that decide to enter a new geographic area, supplier firms that choose to enter their customers; business, or buyers firms that

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