Stc Five Forces Model and Competitive Advantage

Please see Exhibit 1 and Exhibit 2 MCI’s external needs will keep increasing over the next few years as the operating margins would shrink because of higher competition & higher access charges. In order to increase its market share, MCI would need to continue investing huge capitals in its network. As per exhibit 9 of the case, it is anticipated that MCI will

I am going the review the Article "The Five Competitive Forces That Shape Strategy" written by Micheal E. Porter. This article was published in Harvard business Review in year 2008.

The future of the telecommunication industry is an exciting future. No longer can these companies depend on telephone service plans to maintain profit. Each company needs to find other avenues, packages and services that can be sold to existing customers while attracting new customers. The companies

There are many network equipment suppliers, which are suffered from the down telecom market. Having mature technologies also commoditize the products. As such, the bargaining power of suppliers has been weak.

The nature of the market structure and demand of Cisco Systems is its business market which contains fewer but larger companies. For Cisco Systems, this implies that even though they have fewer clients than other companies, they still have a good and profitable relationship with their clients. For the customers of Cisco Systems, this implies that they will receive better and faster service and products because they don’t have to compete for the attention and service of Cisco Systems.

     In today’s telecommunication market there is a lot of competition by industry giants such as Sprint,

8. Threat of New Entrants: “There are a number of low-cost carriers (LCCs) in the domestic market and the Company competes with LCCs over a very large part of its network.”

In the article, “The Five Competitive Forces that Shape Strategy,” Michael Porter argues that the five forces are an important element for managers and investors in the business industry. Porter stated that it is important to “understand the competitive forces, and their underlying causes” which many companies will use to determine if they will gain profit or not (Porter 80). Companies determine their profitability of the industry through the level of the force that they face. For instance, when the forces are favorable, most companies will be profitable. Porter gives a detail description of the five forces and explains the importance of each force. The five forces are the threats of new entrants, the power of the buyers, the power of the suppliers, the threats of substitute for products or services, and the rivalry among existing competitors. Porter believes that “a company strategist who understands the competition extends well beyond existing rivals will detect wider competitive threats and be better equipped to address them” (Porter 93). In other words, when strategists understand the different forces it will benefit them to make better decisions and to be ready to face the different challenges between competitors. In the article, Porter’s main goal is to present the importance of the five forces to the audience.

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

Competitors might face increasing costs when firms deliberately increase the price of supplies or when competitors are forced to bid for remaining inputs. However, this does not mean it will increase competitor’s cost if supplies are available from alternative suppliers.

The threat of new entrants refers to the threat posed by new competitors within an industry. If it is easy for new firms to enter the industry barriers to entry are low and the threat of new entrants is high. A profitable industry attracts more competitors. Economies of scale, learning curve effects and other macro factors impact the nature of an industry 's

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

The Competition: Suppliers need to be able to keep costs down, in order to keep

 In general, manager’s look at competition has been too narrow. There is a broad set of competitors that need to be looked at, which are described in “The Five Competitive Forces That Shape Strategy” by Michael E. Porter. The model explains that there are several other forces in the competition for profits that the strategist should be aware of when forming a stagey. Those forces determine the profitability of the industry and are the most important to look at when you are forming a strategy. These five forces are are the “industry structure” model which contain: New Entrants, Suppliers, Buyers, Substitutes, and Existing Competitors.

Date: Program: Course Authors Teacher Title Strategic question Purpose 2008-05-26 International Marketing Master Thesis International Marketing (EF0705) Parunya Vanasakul Ploychompoo Wankeao Supisra Arayaphong (830422) (850418) (831102) Tobias Eltebrandt The battle of DTAC in Thailand’s mobile phone operator market How can DTAC gain higher market share by focusing on customers in Bangkok? The purpose of this research is to investigate, analyze current competition between DTAC and other competitors with customer insight in order to find out the possibility for DTAC to gain more market share in Thai telecommunication market by focusing on customers in Bangkok area. Researchers apply ‘Business Strategy theory and Marketing mix for