Porter Five Forces Model

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Porter’s Five Forces Model: an overview Porter’s Five Forces Model: an overview Abstract Porter’s Five Forces Model is a structured framework for analyzing commerce and business establishment. It was formed by Michael E. Porter of the Harvard Business School between 1979 and the mid 1980’s. Porter developed the Five Forces model in opposition to the SWOT (strengths, weaknesses, environmental opportunities, threats) analysis that was an industry standard for businesses to determine how they compared to other businesses in a certain market or if there was opportunity to expand into different markets. Porter’s Five Forces Model: an overview Porter’s Five Forces Model is a structured framework for analyzing commerce and business…show more content…
the products of insurance companies and the convenience of retail stores. (Boström, Wilson, 2009) The bargaining power and leverage exercisable by suppliers of inputs Powerful suppliers can deliver raw materials at a high price to capture some of their customers ' profits. Suppliers are powerful when they can credibly threaten their customers with forward integration, are more concentrated than their customers, sell differentiated products (instead of commodity products), provide important and difficult to replace inputs or when customers face high switching costs. (Niedderhut-Bollman, Theuvsen, 2008) The bargaining power and leverage exercisable by buyers of the product When buyers are powerful, they set prices and limit the supplying industry 's profitability. Buyers are powerful when they are concentrated, possess credible backward integration options, purchase a significant portion of the supplier 's output or can easily and cheaply switch to other suppliers or substitutes. (Niedderhut-Bollman, Theuvsen, 2008) In the UK clothing industry there is a growing trend among retailers towards downsizing the supplier base to seek cost reduction, high quality, and reliable service deliveries from the manufacturers. Retailers play manufacturers off against each other to achieve their objectives. (Adewole, 2005) References Adewole, A. (2005). Developing a strategic
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