...Porter’s Analysis Porter’s analysis frequently used to identify an industry’s structure in order to determine corporate strategy and helps determine an industry’s weaknesses and strengths. Porter’s model can be applied to any segment of the economy to search for profitability and attractiveness. The five forces identified are industry rivalry, threat of entry, bargaining power of suppliers, bargaining power of buyers and threat of substitutes. These forces determine an industry structure and the level of competition in that industry. The stronger competitive forces in the industry are the less profitable it is. An industry with low barriers to enter, having few buyers and suppliers but many substitute products and competitors will be seen as very competitive and thus, not so attractive due to its low profitability. Rivalry among existing competitors or our industry rivalry – this force is the major determinant on how competitive and profitable an industry is. In competitive industry, firms have to compete aggressively for a market share, which results in low profits. Threat of new entry – this force determines how easy (or not) it is to enter a particular industry. If an industry is profitable and there are few barriers to enter, rivalry soon intensifies. When more organizations compete for the same market share, profits start to fall. It is essential for existing organizations to create high barriers to enter to deter new entrants. Bargaining power of suppliers...
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...MANAGERIAL SKILLS and STRATEGIC LEADERSHIP ANALYSIS OF SISECAM-TRAKYACAM and FLAT GLASS INDUSTRY OF EUROPE BY PORTER 5 FORCES MODEL Trakya cam has been established in 1978 under SİSECAM Group in order to feed local market and wordwide demands of Flat glass , Automotive glass, Solarglass and Home appliance glasses. Over % 80 of Flat glass is being used for construction and rest is used for other apliane like Solar, automative and Home appliances Trakya cam operates with 4 float lines in Turkey and 2 lines in Bulgaria and it is in the top 5 companies in the World. Threat of New Entrants /Potential Competitors –Low Pressure The major competition is between Asahi Glass, NSG/Pilkington, Saint Gobain, Guardian and Sisecam. The establishment of a new float line costs approximately between 70 mil. € and 200 mil. € according to the size and also demands upgrades and repairs with a cost of 50 mil € during its lifepan of nearly 15 years. This huge investment keeps the new entry barriers relatively high. This condtion is also keeping the major competition between the top 5 companies continuously. Threat of Substitude Products-Low Pressure There is no substitude of flat glasses. In some appliances plastic can be used but it can not be a called a substitude because of the very low apllicabilty level . The Bargaining Power of Buyers- Medium Pressure % 70 of the flat is sold to processors whose process and sells the to the individual buyers. Since the flat glass produced...
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...which assumptions they are based upon; * complete, i.e. they do not omit important components; * correct, i.e. the answer addresses the task set in the question and the answer contains no errors; and * well written, i.e. the answers are appropriately structured, clearly expressed and grammatically correct. You should use additional references to the reading provided so far in the unit. The reference list does not count towards the word limit. On iLearn you can find the Aldi case. This assignment, as well as the group assignment, is based on this case. It is also advisable to consult the marking criteria on iLearn. Question 1 The information in the case (Aldi) is not sufficient for making an informed and complete industry analysis based on Porter’s...
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...Porter’s Analysis: Pharmaceutical Industry | Submitted to Dr. Grace Khoury | By: Asem Masri. Student No. 1125420 | 11/6/2014 | 1. Contents Introduction 1 Porter’s Five Forces Analysis 1 Threat of new entrants 1 Rivalry among existing firms 2 Threat of substitute products 2 Bargaining power of buyers 3 Bargaining power of suppliers 4 Relative Power of other stakeholders 4 Conclusion 5 References 5 Introduction The pharmaceutical industry in Palestine is one of the most profitable industries, with the Palestinian companies owning 55% and 30% market share of the private and public sectors respectively, and high potential of growth even more, in a market estimated at around USD 100 million. All these companies mostly reproduce generics that are seen as commodities rather than differentiated, and highly depend on preferred agreements with pharmacies, doctors, hospitals and medical centers to serve both as their marketing and distribution channels. All operating firms in the industry are publicly traded companies, are highly controlled and regulated, depend heavily on technology and require vast financial resources. Because of the large size , high complexity and vast financial requirements of the industry, it won’t be a straight forward task to decide on whether this industry is attractive to enter or not, without performing proper STEEP and industry analysis. In this case, we will focus on performing pharmaceutical industry analysis using Porter’s...
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...Assignment on Porter five forces analysis of Bengal Meat Submitted To Dr. Mohammad Sakhawat H Bhuiyan Assistant professor, USB | University of Liberal Arts Bangladesh. Submitted By Name | ID | Pervej Molla | 112011148 | Date of Submission: 14/12/2014 About Bengal Meat: Bengal Meat Processing Industry is the export oriented world class meat industry. They produce safe healthy meat and meat products that are of the highest quality and standard for domestic and International Consumers. The company provides fresh, hygienic and Halal meat. Bengal Meat has been regularly exporting cattle and goat to Kuwait and Dubai with a high degree of success over the past few years. Bengal Meat is also a regular supplier of beef and mutton to five star hotels in Dhaka city. Production capacity is 22 tons of meat per eight hour shift. It has its own veterinarians present at the processing factory to carry out ante mortem and post mortem on the cattle and goat, hence ensuring a consistent and high quality of meat. It has recently expanded its operations into the retail market in Bangladesh and has opened multiple retail outlets selling processed and fresh meat across the capital to cater the local population. Bengal Meat ensures meeting statutory and regulatory requirements and food safety requirements of ours consumers. Accordingly they meet world export standard and other benchmark like ISO, HALAL and environment license. Bengal Meat offer Halal, Fresh and Superior Quality...
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...A WATER UTILITY CONCESSIONER PORTERS FIVE FORCES ANALYSIS 1. Rivalry among existing competitors- Low to Non-Existent. Since it is under concession agreement, there is no other water utility company that can engage any business similar to A Water Utility concessioner, unless granted by the government under special agreement and with full knowledge and approval of A Water Utility concessioner. 2. Threat of new entrants- Low to Non-Existent. Companies that may want to apply for the concession must first comply with government requirements and also must have a substantial amount of capital investment (around 6 Billion Dollars starting capital), not to mention the technical expertise to run and maintain a water utility company. 3. Bargaining Power of Supplier- Medium. Although the primary raw material of A Water Utility concessioner is water which is basically free, the materials used for distribution line maintenance and expansion are quite few. Though this is the case, A Water Utility concessioner still has a slight control on the pricing of these materials unless the raw materials for these items like resin, steel, alum coagulating chemical used in treating raw water), etc. increases. 4. Bargaining Power of Customer- Medium. This is due to the regulated tariff by the government under the MWSS Regulatory office which deals directly with A Water Utility concessioner.\ 5. Threat of Substitute- Low. The small water refilling stations also get their...
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...Introduction This paper shall involve and include a discussion and analysis of the macro environment of business using the extended PESTLE tool and an analysis of the micro environment in which the business operates by use of the Porters Five Forces Model as a tool. From the analysis of the micro environment of the business, one trend and one crisis will be identified and there will include a short strategy in which the business can address each of these issues. In this case, the situation surrounding Spur Steak Ranches shall be taken into consideration. About the business Spur Steak Ranches is a steakhouse franchise restaurant chain originating from South Africa. Its menu mainly features beef burgers, steaks and ribs, along with salads, chicken, seafood and vegetarian options. The company was founded by Allen Ambor in 1967, when he opened the Golden Spur in Newlands, Cape Town P²E²STLE Analysis on Micro Environment Political The operations of Spur Steak Ranches are highly influences by the laws and policies in traduces and enforced by the government of South Africa. Regarding restaurants in South Africa, health legislations are enforced to ensure that the premises and equipment of restaurants are of the correct health and hygiene standards. In the case of restaurants in South Africa, a license from the local health department is commonly required to operate and proceed in such a venture. The government of South Africa controls the license given for the opening...
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...Porter’s 5 Forces Analysis = Suppliers, Customers, New Entrants, Substitute Products, Competitors What is Porter’s 5 Forces Analysis? Porter’s 5 forces analysis represents the competitive environment of the firm. It is a strategic foresight to avoid putting the competitive edge at risk and ensure the profitability of products on a long term. For the company this vision is quite important because the firm is able to direct its innovations in terms of choice of strategies and investments. The profitability of businesses within the industrial structure depends on the following forces: Competitive rivalry within the industry; Threats of new entrants; Threats of substitutes products; Bargaining power of customers; Bargaining power of suppliers. Golden Rules 6th force = Often the model is adjusted with a 6th force, the public authorities. This is important because the law and the norms can influence each of Porter’s 5 forces. Key factors for success = The key success factors of the environment have to be identified. To have a competitive advantage some strategic elements should be controlled. Threats of new entrants Public Authorities Bargaining power of suppliers Competitive rivalry within the industry Bargaining power of customers Threats of substitute products © Copyright 2008 LUXINNOVATION G.I.E., The National Agency for Innovation and Research in Luxembourg 1/2 Porter’s 5 Forces Analysis = Suppliers, Customers, New Entrants, Substitute Products...
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...A Critical Analysis about Competitive Advantage of Apple Inc. based on the Porter`s Five Force Model Northeastern University Strategic Leadership Xiaolong Cao Instructed by James Lux June 6th 2016 Abstract This article aims to detect two key areas in Apple`s competitive advantage through using Porter`s Five Force model. According to the knowledge learned from class, there is no forever lasting competitive advantage, so through analyzing the case of Steve Jobs competitive strategy it presents a clear and reasonable structure and explanation of their competitive advantage. After doing this analysis, this article helps to fine both the disadvantage and advantage of their competitive advantage, and each of them contains two aspects according to Porter`s Five Force Model, which provides a reliable and meaningful support to test and excavate the effect of competitive advantage and future developing orientation. Introduction In the modern time, there are numerous resources that identify the importance of the competitive strategy. The ever growing technological trends and volatility within business operations in today's society make it extremely difficult for organizations to stay complacent with their strategies. Adjustments and new ideas need to constantly be developed to be able to maintain a competitive edge. The most obvious examples happen in IT industry, high performance laptop was a competitive advantage 2 years...
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...Threat of new Entrants – Low The Consumer Technology Industry sets difficulties for new entrants to the market; therefore it suffers relative low threat of new entrants on to compete with market share. This type of industry sets a hard entry barrier for new consumers to compete with existing and well established companies such as Apple Inc., Dell Computers and Sony, who operate with use economies of scale and product differentiation to compete between each other. The technology industry is a difficult industry to penetrate if one is looking to start a small business. It requires great amount of capital invested for manufacturing, research and development and high labor force to operate the machine in order to increase production, on a goal to matching production of bigger firms. Companies like Apple Inc., Dell and Sony take advantage of multinational resources and transfer production to other countries where they are able to achieve greater production amount, for a lower cost, and also where labor is relevantly lower than in the United States. The advantage of this is reaching a lower cost of goods once it hits the market, promoting competition and higher returns for these mega companies. In order to achieve economies of scale, a great amount of capital requirement in necessary. These large corporations run on great amount of self-operated and man-operated machinery that requires great investment to be built, operated, and serviced. Also to design the machinery a highly...
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...Porter's 5 Force Analysis Rivalry (High) Rivalry within the Canadian Airlines Industry is relatively high although WestJet and Air Canada are the two largest companies. This is due to various reasons which include difficulties in exiting the company,high levels of demand and price competition. The demand for the industry is huge and its a billion dollar market which airline companies want to control. The Airlines Industry is highly saturated on domestic and international levels which creates high rivarlries. Companies compete through prices, offering various products and customer service. Market Share is created in this market through price competition, so when major company decreases their price many competitors must price match in order to keep the rivalry strong. Also, exiting the industry is highly difficult due to sunk costs and losses during the liquidation process. Buyer Power (High) Buyer Power for this industry is high due to the large number of airlines in the industry. Most consumers are price sensitive which will force most competitors to adapt. This can be done through lowering prices and/or offering different products such as first class, paid in-flight cafe, limo services, etc., to maintain market share. Due to high price sensitivity and the buyers power to switch, many lower class airlines can avidly compete against larger airlines. Buyers can pick and choose which airlines to fly with and that is becoming easier with their ability to quickly compare prices...
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...McDonald’s Corporation Analyst Maria Jose Abuawad April 23, 2013 Pros: Cons: Figure 1 1 Year Performance MCD vs. S&P 500 Ticker Exchange Industry Sector Classification Market Cap. 52 Week Price range Recent Price Current P/E Projected 2015 P/E Projected 2015 EPS Dividend Yield Debt Rating Beta MCD NYSE Restaurants Consumer Staples Income and Capital Appreciation US $99.3 Billion $83.31 - $99.78 $99.05 18.48 17.5x $7.24 3.10% A 0.34 Recommendation: HOLD Strong brand Economies of scale Cohesive franchisee system International growth opportunities High profit margins Pays a dividend Market share leader Vulnerable to currency exchange Highly competitive industry Obesity propensity Porter’s Five Forces: Threat of Competition: HIGH Threat of New Entrants: LOW Threat of Substitutes: HIGH Power of Suppliers: MODERATE Power of Buyers: MODERATE Brief Overview McDonald’s is the leading global foodservice retailer with more than 34,000 local restaurants serving nearly 69 million people in 119 countries. The company operates in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. The restaurants offer various food items, soft drinks, coffee, and other beverages, as well as breakfast menus. McDonald’s employs 1.8 million people. It also franchises 80% of its restaurants. The company was founded in 1940 and is based in...
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...Analyse de Porter L’analyse de Porter repose sur l’analyse de cinq éléments : les entrants potentiels, la force de négociation des fournisseurs et des clients, les produits de substitution et l’intensité concurrentielle. L’analyse de Porter a pour but de connaître l’attractivité de l’industrie. Ainsi, dans cette partie, nous nous demanderons si l’industrie du pneumatique est attractive ou non. 1. Entrants potentiels Les entrants potentiels sont surtout les firmes asiatiques qui misent sur le bas de gamme pour venir concurrencer les leaders en place. Mais ont-ils une chance de rivaliser avec ces-derniers ? Pour répondre à cela, il faut s’appuyer sur l’analyse des barrières à l’entrée : * Les économies d’échelles : La production mondiale de pneus est intensive. En effet, elle dépasse 3,1 millions de pneus par jour à savoir plus de 38 pneus par seconde ! En outre on compte 75 sites de production de pneus dans le monde. Dès lors, les économies d’échelles sont conséquentes dans cette industrie. De surcroît, les trois grands leaders de l’industrie pneumatique que sont Michelin, Goodyear et Bridgestone ont opté pour une politique d’acquisition à la fin des années 1980 (Bridgestone a racheté Firestone, Michelin Uniroyal-Goodrich et Goodyear Dunlop). Ils forment également des alliances stratégiques et des joint-ventures ce qui leur permet de réaliser d’importantes économies d’échelle. * L’intensité capitalistique : L’industrie du pneumatique est à forte intensité...
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...Executive Summary Porter Airlines, a short-haul commercial airliner established in 2002, have enjoyed significant and steady growth since inception. The concern now is to devise a solution that will allow Porter to continue its controlled expansion strategy, as it has been so successful and integral to the growth of the company over the past several years. Situation Analysis Porter Airlines operates in a fiercely competitive airline industry, where competitors compete based on price, service, and comfort of passengers, and frequently engages in predatory practices to squeeze out smaller players in the market. The performance of the company depends on external environment factors, such as economic factors of oil and fare prices that will influence margins, or political factors impacting the future bridge and accessibility improvements to the city center airport. Porter’s competitive advantage is linked to the convenience of the Toronto City Center Airport, such as proximity to business core and expedited security and check-in times. Additionally, a critical success factor for Porter is to maintain the commercial exclusivity on the airport, to take advantage of cost savings as a result of being the owner, tenant, and operator. Competitive advantage is also a result of operating a single class of aircraft that has significant cost and operational efficiencies. Alternatives and Recommendation ------------------------------------------------- Several alternatives were provided...
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...5 FORCES ANALYSIS The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on you as a business manager are immediate because it determines the competitive rules and strategies you are likely to use. Learning about that structure will provide essential insight for your business strategy. Michael Porter has identified five forces that are widely used to assess the structure of any industry. Porter’s five forces are the: In a simple word, we can define that the Threat of new competition is a profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards zero (perfect competition). Threat of substitute products or services is the existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives. Note that this should not be confused with competitors' similar products but entirely different ones instead. Bargaining power of customers (buyers) is the bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes. Bargaining power of suppliers is the bargaining power...
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