...been said that Porter’s five-forces analysis turns antitrust law on its head. What do you think this means? Antitrust laws are intended to protect, promote competition and to push industry profits towards competitive floor in order to resist market dominance. Porter’s five forces model reflects that an industry has absolute market power if threat of entrants and substitutes are low along with weak bargaining power among suppliers and buyers, and if industry is not competitive. 2. Comment on the following: All of wisdom contained in the five-forces framework is reflected in the economic identity: Profit = (Price – Average Cost) x Quantity [π = (P-AC) x Q] Porters all five competitive forces affect the variables in equation: (1) Rivals: If competition within industry is high, profit π will be lower due to lower P . (2) Entry: If barriers to market entry are weak, new entrants in industry will boost competition, reducing P in order to avert market entry. Or new competitors will increase supply (Q), driving P & π down. In addition to this, firms operating at full capacity will be left with only choice of raising P to maximize π. (3) Substitutes: Availability of substitute goods can limit price level P, so as to deter buyers from switching to substitute product or service. (4) Suppliers: High bargaining power of suppliers can cause firm’s AC to increase, as a result driving Q down. (5) Buyers: Buyer’s high market power will force P to reduce. 3. How does...
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...illustrate the SBU’s (Strategic Business Units) for the organization External Environment 3. Apply PESTEL to the chosen industry. Illustrate and provide detailed explanations 4. Apply Porters 5 Forces to the relevant industry /organization /sector. Illustrate and provide detailed explanations 5. Illustrate in a grid format: Opportunities and Threats Internal Environment 6. Apply McKinsey’s 7S matrix to the organization /sector 7. Apply Marketing mix to the organisation /sector 8. Illustrate in a grid format: Strengths and Weaknesses SWOT Analysis 9. Illustrate in a grid format: corporate SWOT Analysis 10. Illustrate in a grid format: SBU SWOT Analysis (For Apple choose ipad and for Tiffany’s choose Jewellery Strategic Positioning 11. Identify competitors for Apple or Tiffany’s and using a perceptual map with appropriate axes demonstrate a gap in the market 12. Identify an appropriate portfolio analyses tool and apply it to demonstrate competitive advantage Application Use relevant marketing planning tools and present in appropriate formats where applicable Word Length The word limit is 1,500 words (+/-5%). All assignments must be submitted with a word count at the end of the work (available on all word processors). Excessive,...
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...Maung Aung IS – 535 Study Guide Answers 1. Why Information Systems so important? Information Systems are not just technology, it is also a business perspectives. Information Systems are a foundation for conducting business today. Information Systems are essential tools for helping organizations operate in a global economy. Many companies are trying to become more competitive and efficient by transforming themselves into digital firms where nearly all core business processes and relationships with customers, suppliers, and employees are digitally enable. Businesses today use information systems to achieve six major objectives: Operational excellence, new products, services, and business models; customer/supplier intimacy; improved decision making; competitive advantage; and day to day survival. 2. What are the features of an organization? All modern organizations have certain characteristics. They are bureaucracies with clearcut divisions of labor and specialization. Organizations arrange specialists in a hierarchy of authority in which everyone is accountable to someone and authority is limited to specific actions governed by abstract rules to procedures Organizations try to hire and promote employees on the basis of technical qualifications and professionalism. The organization is devoted to the principle of efficiency: maximizing output using limited inputs. Other features of organizations include their business processes, organizational culture,...
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...Exposure: Three-Year Strategic Plan Sean McNeely University of Maryland University College Table of Contents Table of Contents 2 Introduction 3 Vision Statement 3 Mission Statement 3 Core Values 3 Objectives 4 SWOT Analysis 5 Michael Porter’s “Five Forces” 8 Product Design and Assembly Strategy 10 Marketing Strategy 12 Compensation and Labor Strategy 13 Corporate Citizenship 15 Financial Strategy 15 Summary 16 References 17 Exposure: Three-Year Strategic Plan Introduction Exposure currently shares the global camera market evenly with four competing rivals. While we enjoy a strong competitive position in the North American market, Exposure’s future will depend on our ability to increase our competitive edge over rivals in the other three primary global markets. This Strategic Plan details the priorities, goals, and basis for decision-making we will use to gain a larger slice of the global camera market over the next three years, while ensuring good corporate citizenship, stability, and growth. Vision Statement We at Exposure pride ourselves on our core values, which ultimately filters into our products, employees, services, and reputation. Furthermore, we strive to be environmentally sound and safe so that our children are able to enjoy this beautiful world as we do today so that it is able to be captured by the quality cameras we produce. Mission Statement Our...
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...INDUSTRY COMPETITION: Amazon exists in a highly competitive e-commerce industry with tough competitors like Apple, Barnes and Noble, E-Bay. However Amazon has competitive advantage in the following aspects: i) Pioneer Advantage: Amazon established its niche as the first online book seller in the year 1997. Today Amazon is the nation’s biggest book seller and world’s largest online retailer (New York Times, 2012). Amazon has managed to keep up with technology by investing in cloud computing and bringing to market mobile devices like Kindle e-reader. The recently announced Kindle Fire is another strategic differentiator in Amazon product portfolio. Kindle Fire facilitates delivery of Amazon’s services and content to customers, and provides them the mobile-device experience. It has established itself as the leading Android tablet with a 54.4 percent market share (comScore, 2012). ii) Amazon’s main focus on customer satisfaction has ensured their position in the on-line retail market. Amazon is highly invested in providing customers convenience, selection, prices and personalized services (Mirow, 2005). Amazon’s e-commerce platforms with highly granular array of choices and mobile shopping apps, have vastly improved the shopping experience for the customers. According to a recent online retail customer satisfaction survey, Amazon topped the list, outdoing competitors like Apple, eBay, Netflix, Best Buy, Walmart (techcrunch, 2012). iii) Amazon has been experiencing marked...
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...Jake Janjigian SI 422 C1 Kirks 9/16/13 Class #4 – Understanding the Five Forces 1) For each of the Five Forces, the Porter article cites several factors that influence its "strength" (i.e., the amount of downward pressure it exerts on industry profits). For each Force, pick one of these factors, and bring a NEW example from the business world to share in our class discussion. Buyers: In the oil industry, a few large companies control the supply of gasoline in the United States and have generate low buyer power within the industry. Companies like Exxon, BP, Shell, and Lukoil can limit supply and control prices without any complications because demand for their product is so high, there are no widely available substitutes, and their products are undifferentiated. Suppliers: The upstream suppliers in the oil industry, being OPEC, also have a large amount of supplier power because they exert a lot of control on the prices and quantity of oil that is bought by the major players within the industry. Substitutes: There are really no feasible replacements to gasoline in today’s economy. Electrics cars and cars that run on ethanol do exist and are becoming more popular, but gasoline and oil remain as the widespread standard for consumers. As a result of this, oil companies can maintain and manipulate their prices because there is no threat of them being replaced. New Entry: It is extremely costly to enter the oil industry as the major players have become so entrenched and...
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...Business Policy & Competitive Strategy Vivek Khanna TATA Motors This project is a part of the internal assessment for the subject Business Policy & Competitive Strategy. I have developed a Porter’s Five Forces analysis for the organization. I identified strategic strengths and weaknesses and identified core competencies of the organization . The company that I have taken into account to analysis the Porter’s Five Forces is the Tata Motors. The Specific product that I will be taking into analysis is the NANO CAR. This segment has a great growth potential in developing countries , especially in a country like India. 1. Potential Entrants – Threat of new entrants 2. Buyers – Bargaining power of buyers 3. Substitutes – a. Threat of substitute products or services b. Rivalry among existing firms 4. Suppliers - Bargaining Power of Suppliers 5. Other Stakeholders – Relative Power of Union, Governments etc. A brief Information about the product : The Tata Nano is a rear-engine, four-passenger city car built by Tata Motors, aimed primarily at the Indian market. The car is very fuel efficient, achieving around 78mpg on the highway and around 92 in the city. It was first presented at the 9th annual Auto Expo on 10 January 2008, at Pragati Maidan in New Delhi, India. Nano had a commercial launch on March 23, 2009 and, a booking period from April 9 to April 25, generating more than 200,000 bookings for the car. The sales of the car will begin in...
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...Application of Porter’s Five Forces Model on Tata NANO Brand Name: Unit Name Unit Code Tutor School Date Introduction The turnover in automotive industry is growing significantly. Companies need to sell their product across borders. To realize this, companies must evaluate the market forces in target markets in order to increase sales. One strategic tool used in evaluating market forces is porters five forces model. This tool highlights the key factors that determine the industry competition and the viability of such a market. The porters five forces model has been evolving with time. The principle ‘’the state of competition in an industry depends on five basic forces’’ (Porter, 2008 P.3) is still relevant. This analysis model covers a wide range of factors affecting the industry. Companies with awareness about their environment are able to make strategic decisions concerning their business. This paper discuses the application of Michael porter’s five forces model by Tata Motors Company on their new product, Tata Nano. Tata motors are the largest automobile company in India with revenues in excess of USD 16 billion in 2011. Tata motors have subsidiary companies and associate companies involved in various industries including mining, oil, manufacturing, and telecommunications. Tata motors have operations in Spain, Korea, Thailand, UK, and South Korea. The paper begins by identifying porters five forces. Second, a brief history of...
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...The general environment is a group of seven environmental segments (demographic, economic, political/legal, sociocultural, technological, global, and physical) which influence an industry and the firms within it. A firm does not directly control the general environment, but by all means firm’s actions are influence by the segments. The industry environment directly influences a firm and its competitive actions and response. A firm response and competitive actions may be influenced by these set of factors: the threat of new entrants, the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competitors. 3. Discuss the four activities of the external environment analysis process. The External Analysis examines opportunities and threats that exist in the environment. Both opportunities and threats exist independently of the firm. Firms engage in external...
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...Case study on | Strategic Analysis | Of Dell Inc. | | mujeeb | [Pick the date] | | Introduction: The purpose of this report is to analyze the strategic position of Dell Inc. Headquarter in Round Rock, Texas; Dell computer was founded in 1984 by Michael Dell who was then an undergraduate student at the University of Texas. From very inception the company is providing superior value to its target market by providing latest technology at competitive prices around the world. Dell is cited as the largest player of the personal computer market. The company follows unique selling policy that is known as Dell Model—selling computers and other equipments directly to customer and build-to-order strategy thereby eliminating the intermediary margins and inventory costs. The mission statement of Dell has been divided into three parts customer satisfaction that states “We are an established company striving to satisfy customers by meeting their demands of quality, responsiveness, and competitive pricing. Each customer is #1” , team satisfaction that states, “Management and employees are committed to cooperating as a team for the purpose of profitability and gratification of a job well done” and community satisfaction “We will provide jobs in a clean, safe, environmentally sound atmosphere and be an active participant in community affairs” (Dell, 2010). 1. External Analysis: The primary industry of Dell is personal computer and computer equipments that are evolving...
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...The proposal submitted by Gabriella Baars, Avia Astryd, Hanjun Chen, gave an explicit outline of their action plan. Their proposal is well structured, and is shown in a clear and consistent way. The analysis of the condition is relevant and concentrated. It focuses on the problem faced by Nokia about the make or buy decision, loyalty to its supplier (in that case Symbian) and made a suggestion that Nokia should keep in mind alternative outsourcing. The subject is socially relevant and well described. As some new operating systems help mobile companies make profit, it’s a fact that Nokia has been a little bit desolated. This topic is both scientifically and socially relevant and easily researchable. Since Nokia and Symbian are both big companies, it is easier to find and collect information and references for the background information. The subject is linked to the theoretical framework. This proposal describes how Porter’s five forces are applied to Nokia. As it is said Symbian can be considered as an important external factor, which influences Nokia’s profits. The paper emphasises on the powers of suppliers in the five forces analysis and thus conclusions for the dependency of Nokia can be made. It also illustrates other forces in Porter’s model like the competitors force. The topic of the bargain power of consumers is also described well: Consumers choice is affecting Nokia’s profits since Nokia is missing the target market preferences as consumers lean towards high end...
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...APPENDIX 1 - Porter’s Five Forces Model by 0726335 The analysis of Cosmetic Industry has come out with Poter’s five forves model to analyze the level of rivalry in this industry. In the Porter’s Five Forces Model the rivalry which is in the middle is most powerful of the five compentitive forces. Rivalry among competing firms (High) There are a large number of competitors in this industry, and all competitors are competing for the same customers. Thus Carlina have to compete against its direct competitors that sell similar products. The large number of direct competitors in the industry causes a high degree of rivalry. Competitors are also selling similar products, which is cosmetic product. Due to having so many options, customer is able to switch between brands easily. The industry is in its maturity stage causing the market growth to be static. Thus all companies are striving to maintain its market share in the industry against their competitors. Barriers to enter for new competitors (Moderate) The barriers to enter for new competitors are at a moderate, especially during the maturity stage of the industry’s life cycle. Majority of firms that already existed in the industry have developed economies of scale, thus providing a cost advantage to them over the new entrants. If new companies try to enter into the market, it will face problems especially to cover for the expenditures, as they have not established...
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...The Five Forces Model An industry can be defined as a group or companies offering products or services that are close substitutes for each other. Close substitutes are products or services that satisfy the same basic consumer needs. For example, tea and coffee are close substitutes. Managers have to analyze competitive forces in an industry environment in order to identify opportunities and threats confronting to a company. Michael E. Porter of the Harvard School of Business Administration has developed a framework that helps managers in this analysis. Porter’s framework, known as the five forces model focuses on five forces that shape competition within an industry: (1) the risk of new entry by potential competitors, (2) the degree of rivalry among established companies within an industry, (3) the bargaining power of buyers, (4) the bargaining power of suppliers, and (5) the closeness of substitutes to an industry’s products. A. Potential Competitors Established companies try to discourage potential competitors from entering, since the more companies enter an industry, the more difficult it becomes for established companies to hold their share of the marker and to generate profits. Thus a high risk of entry by potential competitors represents a threat to the profitability of established companies. On the other hand, if the risk of new entry is low, established companies can take advantage of this opportunity to rise prices and earn greater returns. The strength of the...
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...The Five Forces Framework and Competitive Strategy In this framework due to Michael Porter there are two high-level stages in the creation of competitive strategy, each stage corresponding to a high-level determinant of profitability mentioned in the previous section. The first stage is the assessment of the attractiveness of the industry in which a given company is embedded based on a structural analysis of the industry. In this stage, called the five forces framework, five forces that influence industry attractiveness are identified, as well as the factors (e.g., number of competitors, size of competitors, capital requirements) that determine the intensity of each force and therefore the cumulative intensity of the five forces. The purpose of the five forces framework is to relate the degree (or intensity) of competition in a given industry, as qualitatively measured by the combined strength (or intensity) of five forces, to the attractiveness of the industry, defined as its ability to sustain profitability. Based on the structural analysis, a particular company may be in a very attractive industry (e.g., pharmaceuticals) or in an unattractive industry (e.g., steel). However, though a firm exists in an unattractive industry, it can still be highly profitable by choosing the proper competitive position within the industry, for example, e.g., a mini-mill such as Nucor in the steel industry in the nineteen-eighties. The second stage of strategy creation addresses the competitive...
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...you, by giving them the relevant principles and especially examples of how to apply the principles to one of their SBU’s. Right now they use Porters five forces model quite well so there is no need to deal with that in depth – instead you need to discuss issues of how to identify an industry’s strategic groups, industry drivers and key success factors. Write down your structured notes for the presentation, convincing them to employ you to direct their external environmental analysis. Describe the corporation in your region (and its two or more SBU’s) its industry’s and its existing strategy making process in enough detail for the marker to assess the appropriateness of your presentation notes. The SBU you use as the core of your answer could be real or not. I will be presenting to the board of Woolworths supermarket chain in Australia. It consists of several SBU’s including (but not limited to) Fresh food & Grocery. Woolworths’ vision is to be “first choice for fresh food”. My external analysis below will focus on examples of how to apply the principles of external environment analysis to the fresh food business unit. What are the main industry drivers for Woolworths fresh food and what strategy changes are needed? While Porters Five forces analysis is essential in determining what kind of competitive forces Woolworth face, and how strong they are; in analysing the external environment...
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