...PORTERS FIVE FORCES Porter's Five Forces is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. Porter referred to these forces as the micro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. The five forces of porter’s five forces model are as follows: 1. The threat of the entry of new competitors 2. The threat of substitute products or services 3. The bargaining power of customers (buyers) 4. The bargaining power of suppliers 5. The intensity of competitive rivalry 1. The threat of the entry of new competitors 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. The new entrants face barriers to entry. They need to overcome them to compete successfully. Some of the barriers are capital requirement, customer loyalty, experience, etc. Specialized technology, production and distribution require high capital costs which acts as one of the barrier. The high customer’s loyalty and experience of the established firms also...
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...Porter's five competitive forces analysis is a framework for industry analysis and enterprise strategy of the development in 1979 by Harvard business school of Michael porter. Upon industrial organization economics to five forces that determine the competition intensity and attractiveness of a market. In this respect the attraction, an unattractive industry is in one of the combination of these five forces role to drive down overall profitability. A very small industry will be a close to "perfect competition", which to all of the profits of the business was driven to normal profit. They consist of those forces close to the company that affect the ability to service and make the profit. A change in any of the forces normally requires a business unit to reassess the marketplace given the overall change in industry information. The company is able to apply their own core competitiveness, business model or network to achieve a profit above the industry average. Bargaining power of suppliers The suppliers mainly through its raise prices of input factors and reduce the capacity of the unit value of quality to affect the profitability of existing enterprises in the industry and the competitiveness of their products. The strength of the suppliers forces depends mainly on what they provide to the buyer is input factors constitute a large proportion of the total cost of the purchaser product, when the value of the input factors provided by the supplier, the buyer of the production...
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...Overview Of Telecom Industry | | | Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers. | | Nokia's market share falls below 30 per cent Helsinki: Nokia Corp. reported better than expected first-quarter profits Thursday but its global market share dropped to below 30 per cent for the first time in over a decade as the world's top cellphone maker continued to lose ground to rivals. The Finnish company's net profit in January through March fell euro5 million to euro 344 million ($499 million) from a year earlier. Revenue grew 9 per cent to euro 10.40 billion. The company's share price climbed several per cent as markets had anticipated a greater fall in profits and lower sales, but closed almost unchanged at euro 5.96 ($8.65) on the Helsinki Stock Exchange. The Finnish company has faced stiff competition in recent years in the high-end sector, particularly from Apple Inc.'s iPhone, Android-based handsets and Research in Motion's Blackberry. Nokia sold 24 million smartphones...
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...BUSINESS DRIVEN mis INFORMATION IS EVERYWHERE. INFORMATION IS A STRATEGIC ASSET. WITHOUT INFORMATION, AN ORGANIZATION SIMPLY COULD NOT OPERATE. THIS CHAPTER INTRODUCES STUDENTS TO SEVERAL CORE BUSINESS STRATEGIES THAT FOCUS ON USING INFORMATION TO GAIN A COMPETITIVE ADVANTAGE, INCLUDING: • The core drivers of the information age • Data, information, business intelligence, knowledge • Systems thinking • Competitive advantages • Porter’s Five Forces model • Porter’s three generic strategies • Value chain analysis Many of these concepts and strategies will be new to your students. Be sure to explain to your students that this chapter offers an introduction to these concepts and they will gain a solid understanding of the details of these concepts as they continue reading the text. SECTION 1.1 – BUSINESS DRIVEN MIS Competing in the Information Age The Challenge: Departmental Companies The Solution: Management Information Systems SECTION 1.2 – BUSINESS STRATEGY Identifying Competitive Advantages The Five Forces Model – Evaluating Industry Attractiveness The Three Generic Strategies – Choosing a Business Focus Value Chain Analysis – Executing Business Strategies | | |SECTION 1.1 ...
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...Business Project – HMV Chan Ho Yeung 13431908 Context 1. Introduction 2 2. Comparative Analysis of the company’s competitive position in its various markets 3 2.1 PEST 4 2.2 Porter 5 forces 5 2.3 Value Chain 7 3. Considerations for the company’s position in relation to cross-cultural issues 10 3.1 Hofstede Cultural dimensions 10 3.2 Iceberg model of culture 14 4. The company’s position in relation to corporate social responsibility 16 4.1 Carroll’s CSR Pyramid 16 5. Conclusion 21 6. References 24 1. Introduction People who were born in 1990s or before, they should have gone to CD shops to buy CDs and supported their favourite singers. So that, you must know HMV. HMV, everyone knows that it is a CDs retailer basically. HMV opened in Oxford Street London on 20th July 1921. HMV’s full name is “His Master’s Voice”. At that time, HMV was a part of EMI - Electric and Musical Industries. In 1998, HMV was divested from EMI. It needs to especially mention the logo of HMV. HMV’s logo is based on a dog that called Nipper, is listening to a gramophone. In 1921, when HMV had started, they were a company which sold gramophone and also used HMV’s name to produce TVs and radios. After that, HMV did not sell gramophone, they was transiting gradually to sell CDs. Until now, HMV has changed a lot. They are not only selling CDs, they also sell the other products including film, games and headphones. In 1988, HMV has opened their first overseas store in Canada...
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...its business model 4 2.2.1. Customer Value Innovation 4 2.2.2. Profit Pattern Innovation 5 3. Challenges Analysis 6 3.1. Apple’s challenges 6 3.2. Porter’s Five Force Model analysis 6 3.2.1. Threat of new entrants 7 3.2.2. Threat of substitute products or services 7 3.2.3. Bargaining power of customers (buyers) 7 3.2.4. Bargaining power of suppliers 8 3.2.5. Intensity of competitive rivalry 8 3.3. Innovation Matrix 9 4. Suggestion and action plan 10 4.1. Apple’s Fishbone Diagram 10 4.2. Monetizing for Apple with Web 2.0 strategy 11 4.2.1. N-sided platform 11 4.2.2. Multiple revenue stream 11 4.3. Platform Innovation 11 4.3.1. Production 11 4.3.2. Creative and Media 11 4.3.3. Accessories 11 4.4. Online Promotion 12 4.4.1. Action Plan: 12 4.5. Sustainable Competitive Advantage 12 4.5.1. R&D input 12 4.5.2. Better customer value 12 4.5.3. Sustainable profit pattern 12 5. Business Model Canvas 13 Conclusion 14 Reference: 15 1. Abstract Apple’s huge success set off a global widely discussion on its secret. According to this essay, it is not difficult to find its success story was attributed to its unprecedentedly innovative business model, which was not rare in the typical case analysis of Walmart, BestBuy, and Amazon who are the leader of corresponding industry due to the innovation of business model. Status shows 11 out of 27 new entering Fortune 500 companies from the year 1998 to 2007...
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...dynamics of competitors within an industry is critical for several reasons. First, it can help to assess the potential opportunities for your venture, particularly important if you are entering this industry as a new player. It can also be a critical step to better differentiate yourself from others that offer similar products and services. One of the most respected models to assist with this analysis is Porter’s Five Forces Model. This model, created by Michael E. Porter and described in the book “Competitive Strategy: Techniques for Analyzing Industries and Competitors,” has proven to be a useful tool for both business and marketing-based planning. Background The pure competition model does not present a viable tool to assess an industry. Porter’s Five Forces attempts to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry. This model may be used as a tool to better develop a strategic advantage over competing firms within an industry in a competitive and healthy environment. It identifies five forces that determine the long-run profitability of a market or market segment. * Suppliers * Buyers * Entry/Exit Barriers * Substitutes * Rivalry Supplier power * Supplier concentration * Importance of volume to supplier * Differentiation of inputs * Impact of inputs on cost or differentiation * Switching costs of firms in the industry * Presence of substitute inputs ...
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...regarding managerial issues within organizational context. Your course instructor will select these companies. Your main task is to find out why management of the company of your interest is going through problems and how to solve this. At first you will scan the current scenario and after analyzing and anticipating the problem, you will come up with a set of action plans as your recommendations to solve the management related issues. You will make your analysis and judgment on the basis of following dimensions: • Managerial Functions • Environmental analysis (PEST) • Organizational Behavior (Culture) • Human Resources Practices • Corporate Social Responsibilities You can also use effective tools like and porter’s five forces model, Carroll’s pyramid, MBO scanning and other tools that you will be learning throughout the semester. Format of the write-up: You can use Times new Roman font, 12 or Verdana, 11 or Arial 11. Line spacing should be 1.5 with uniform margin of 1 inch. You must include: • Top Sheet (including you name, ID, section number and project title) • Letter of acknowledgment • Table of Content • Main write up • References...
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...The problems: that have been created due to a well-established product line and target demographic, in a challenging industry environment, facing declining growth and changes in corporate structure and ownership. The case represents the opportunity for students to analyze the effectiveness of organizational strategy and goals. No long term strategic planning (no vehicle growth) Goal: Is to keep the business healthy, keep inventories in line and keep moving forward. We ……. (page209) Goal analysis: SMART PESTLE analysis: It gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization. P (Political): not mentioned in the case E (Economic):1) according to Philadelphia based marketing consultry there were 38 million young people between the ages of 11 and 19 In US, buying power per year is about $2000 per capita. 2) Decline in profit because of currency factor and lower demand in Europe. S (Social): 1) there were 38 million young people between the ages of 11 and 19 in the U.S at the beginning of 2006. Also, there were 27.6 million people from 6 to 12 years old. 2) The number of American ages 25 to 34 was expected to rise to 5.2% of the population by 2010, but those ages 12 to 18 were forecasted to fall by 3.3%. 3) Socio-cultural issues included the worry...
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...The Five Forces Model of Competition The model above is known as the Five Forces Analysis which was designed and created by Michael Porter of Harvard Business School. Each shape defines the five forces that shape competitive rivalry and is relevant to industry profitability. Each new entrant to an industry faces competitive pressures from: • Buyer bargaining power and seller buyer collaboration. • Companies in other industries to win buyers over to substitute products. • Supplier bargaining power and supplier-seller collaboration. • The threat of new entrants into the market. • Rivalry among competing sellers to attract new customers. For a new entrant to the automobile industry there is generally a very low threat. In order for a new entrant to be successful they must be able to mass-produce. Due to the expense of mass production, a new entrant must have a large amount of capital to compete in the automobile industry. Buyers and customers both have high bargaining power when purchasing an automobile. Buyer power is strong when a consumer has a multitude of products to choose from. An example would be choosing to purchase a Ford Expedition or Chevrolet Tahoe. Both are similar in size, gas mileage per gallon, seating and engine size. Each vehicle is produced by a different manufacturer which gives the consumer the ability to create competition. In addition manufacturers are forced to create quality automobiles in order to maintain customer...
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...Group Work: Financial Statement Analysis of your selected listed Bangladeshi company Guideline for Term Paper Dear All, Please complete the strategy analysis and accounting analysis based on the following guideline by next 2 weeks for the company allocated to your group for term paper, and give me the update. Topic Specific Topics Key Questions Strategy Analysis Industry Analysis (Five forces Model) Rivalry -How do firms in an industry rivalry compete among themselves? -What are the dimensions of the competition? Threat of new entrants -What are the legal entry barriers for a new firm? -What are the economic entry barriers for a new firm? Threat of substitute products -Is there any substitute products of the industry? -If so, What is the level of price difference with substitute product? Bargaining power of buyers -What is level of buyers’ price sensitivity? -What is the buyers’ relative bargaining power? Bargaining power of suppliers -How many numbers of suppliers? -How much critical the product is to buyers? Competitive Strategy Analysis Which competitive strategy the company has taken? Cost leadership or Differentiation Corporate Strategy Analysis -Are there significant imperfections in the product, labor or financial markets in the industry in which the company is operating? - Does the company have special resources such as brand names, proprietary know how, access to scarce distribution channels, and special organization...
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...Title: The Fall of IBM Date: September 20, 2013 I. Executive Summary The purpose of this case study analysis is to analyze the situation of IBM in the 1990s, to come up with possible mutually exclusive alternatives for IBM’s management and ultimately, to recommend a possible strategy to regain back IBM’s throne in the industry. The problem of the case study is all about the survival of IBM in a much more competitive market ever encountered by the company. And also, overcoming new challenges brought about IBM’s new management and the dynamic technological environment. The methods of analysis used for this case study are the Porter’s Five Forces Model and the ANSOFF matrix analysis. Brief explanations were provided in each of the methods used for analysis. After analyzing the case study, the following three mutually exclusive alternative course of action were developed: 1. Decentralize Management; 2. Invest heavily on research and development and; 3. Partner with suppliers From the alternatives, I recommend that IBM should partner with its suppliers. Collaboration with suppliers will increase business flexibility and executive level business decision support. This will surely bring the most benefit for the company among the other alternatives course of action. The suppliers play a great role in the industry and having strong connections with them can help the company survive and even excel in the industry. Outline and Implementation: ...
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...Using Porter’s Five Forces Model for Analysing the Competitive Environment of Thailand’s Sweet Corn Industry Tanakorn Rachapila Integral development studies program Faculty of management science Ubon Ratchathani University, Thailand Dr. Sittha Jansirisak Assistant professor, Faculty of engineering Ubon Ratchathani University, Thailand ABSTRACT The competition in Thailand sweet corn industry relatively high: Bargaining power of suppliers: supplier concentration, availability of substitute input, importance of suppliers’ input to buyer and importance of industry to supplier; Intensity of Rivalry of rivalry among existing competitors: number of competitors, augmented capacity in large increments, value of fixed costs and exit barriers; Threat of entrants or potential competitors: economical scale; Determinant of buyer power: product differentiation, switching costs to use other products, switching costs to use other products and buyers’ use of multiple sources, threat of substitute products or services relatively low. Keywords: Environment analysis, Competitive Forces, Competitiveness Porter’s Five Forces, Sweet Corn, Agribusiness 1. Introduction Sweet corn is a major economic agronomy in Thailand. There are large amounts of consumption and utilization of sweet corn each day. The sweet corn is a perennial plant providing greater values to fresh markets and industrial factories. Recently, sweet corn is one of the most popular crops; the 2011 Thai Food Processors’ Association report...
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...1) What are the three parts of sustainability? Social Environment Economic 2) What did Michael Porter come up with? A)Reinnovation B) The Five Forces concept C) sustainability 1) Which country was used as a subject to test the potential benefits from entrepreneurship and innovation in developing countries? (a) Haiti (b) Uganda (c) Ghana (d) Latvia 2) According to the article pertaining to innovation in developing nations, there is a positive relationship between ___________ and __________. (a) education, rate of income (b) cultural barriers, economic development (c) firm size, innovation 3) T/F As a benefit of service innovation, it is believed that users have valid, innovative, useful, and creative ideas. True A unique approach to innovations produces _______ innovation verse a typical strategy that produces ________ innovation. a) radical/incremental b) greater/less c)less/greater d) incremental/radical What is not one of Porters 5 forces for competitive strategy? a) Rivalry b) Substitutes c) Consumer power d) Barriers and entry 1. The adoption of a radical process innovation is significantly promoted THE MOST by: A. Large company size B. The presence of a champion C. Technology policies D. Sustainability Answer: B 2. Which of the following factors DOES NOT impact how well a company innovates? A. Company size B. Level of education C. Race D. Amount of resources Answer: C What factor could influence...
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...Michael Porter’s Five Forces Model (5FM) was published in 1980 and since then has been used extensively to analyse the environment that a firm is operating in or intends to enter. The author uses an extra force which was added to the original 5 by the then C.E.O of Intel Andrew Grove. This force was called the complementors which Prasad feels has enhanced the model further. Complementors refer to the role played by external factors on a firm’s environment. For example the role played by the Irish government in the Irish airline industry with the control of the airports by the Dublin airport Authority (DAA) and not allowing a private company (Ryanair) build a new terminal at Dublin airport. It is used to understand the strategic position of the firm in relation to the extensive forces it has to deal with in an effort to be profitable. If the firm has a clear understanding of its strengths it can take advantage of them but also in case of weaknesses it can improve their situation and avoid making costly errors. It has traditionally been used to assess if new products/services or new markets will be profitable and to decide suitable strategies going forward. “Who controls the present controls the past; who controls the past controls the future.” (George Orwell) In the article the author (Ajit Prasad) asserts that although the 5FM is useful but in order for a firm to assess its ability to enter a new market, it is vital for the decision maker to understand the culture and the history...
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