Porters 5 Forces

Porter’s Five Forces is a framework that consists of five competitive forces, threat of entry, power of supplier and buyer, threat of substitution and competitive rivalry. These forces facilitate the analysis of the task environment of an industry or company (Wheelen and Hunger, 2009).

The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. The threat of

Porter’s 5-Forces Model: A method for examining the competitive environment for a company or industry. It specifies and evaluates threats from new entrants, suppliers, buyers, and substitutes in the arena of competition.

Threat of Substitutes: Few substitutes such as bars for hard liquor, restaurant for food, etc. The threat is low because product sold depends upon customers taste and preference and there is minimal product differentiation.

Wipro technologies are a company focused on the software and information technology service division as a part of the Wipro group whose header quarter located in Bangalore, India (Wipro Technologies Europe A, 2015). Nandy as the director of Sales and Marketing in Europe started the European operation in London as the headerquarter for Western Eurpoe and he was an Indian with the Indian and American working experiences (Wipro Technologies Europe A, 2015). As a global company, Wipro’s European sales, marketing and project management staff were exclusively Indian expatriates with a short time in Europe (Wipro Technologies Europe A, 2015). These staffs couldn’t build good relationships with the

Somehow other countries outsourcing may be slow for in India because of the uncertainty and lack of credibility that exists within the Indian market (Kalegaonkar A., Nov 4, 2008). This may be an obstacle for Clinigene. Moreover, with

One of the biggest impacts of globalization has been to IT (Information Technology) and BPO (Business Process Outsourcing) sector. These two sectors have progressed at never before pace. Key reasons for this is easy and cheap availibilty of skilled workforce with

In his article “The five competitive forces that shape strategy“, Michael Porter (2008) updates and extends his “five forces” framework he first introduced in 1979 and which has influenced the academic and business research for decades. He reaffirms that “THREAT OF ENTRY”, “THE POWER OF SUPPLIERS”, “THE POWER OF BUYERS”, THE THREAT OF SUBSTITUTES”, and “RIVALRY AMONG EXISTING COMPETITORS” are the forces that shape every single industry, and a thorough understanding of such forces help analyze everything from the intensity of competition to the profitability and attractiveness of any industry. The framework has two dimensions; the vertical dimension that connects

“Today, Indian outsourcing is one of the best ways for CIOs to cut application development and maintenance costs, and deal effectively with the peaks and valleys of software demands.” (Yeo). Outsourcing to India is still focused primarily on highly technological aspects, but is not limited there. They are known for creative development in the pharmaceutical field, and have recently developed an unsurpassed medication for adult ADHD. Their superior IT assistance is not limited to companies, they offer many websites for individuals seeking help with programming. In mid 2007, U.S. outsourcing to India reached $4.9 billion. Although technologically advanced, they still lag in economic prosperity and therefore still don’t expect the type of compensation that Americans do. “They

Porter 's five forces framework assesses the competitive pressures a company faces within the industry. The five forces of competitive pressure include: competition from rival sellers, competition from potential new entrants to the industry, competition from producers of substitute products, supplier bargaining power and customer bargaining power. The model helps us determine the strength of competitive pressures and profitability of an industry. [3]

Porter 's Five Forces Model is a critical instrument to break down an outer aggressive environment of the business. The model incorporates threat of entry, the threat of rivalry, the threat of suppliers, the threat of purchasers and threat of substitutes.

The threat of new entrants: According to our text, the threat of new entrants is the possibility that the profits they make in an area may be eroded by new competition. The McDonald’s by me competes with Burger King, Wendy’s, Dairy Queen, and other smaller places like Zel’s. Each time a new place opens the less business they will have. For the other company, there will be a barrier to entry. They will have to use product differentiation to bring in the customers…to make them overcome their loyalty to McDonald’s (Dess, p. 53).

The threat of substitutes is the availability of a product that the consumer can purchase instead of the industry’s product (Free management books, n,d ). A substitute product is a product that produced by other industry and offer similar benefits to the customer as the product produced by the firms within the industry. The threat of substitutes can affect the competitive environment for the firm in that industry and also influence the profitability of the industry. This threat affects profitability of the industry because the consumers can choose to purchase similar product from other industry to instead of the company’s product. Besides that, the more the close substitute product can make the industry more competitive and decrease the profit potential of the firm in the industry whereas the less the close substitute product can make the industry less competitive and

For any company going out for the foreign market is because of any one out of globalization, reducing tariff all over the world, to increase the market share, saturation of the local market, for getting the economies of scale of production, to use their excess capacity and use the resources where it is available at law cost.

Porter’s 5 Forces analysis is a commonly used business theory that identifies the 5 competitive forces of an industry. By identifying and analysing these forces you can determine an industries weaknesses and strengths. Porter recognised the 5 forces in most business markets to be internal rivalry, entry, substitutes and compliments, supplier power and buyer power.