Describe real world examples of two of porter's 5 froces
in action. you do not have to find an example of all 5 forces, but
you must discuss at least two. you are not simply naming the
company or product, but you must also explain why your selection
should be classified at the force that you have
identified.
Answer -- Real world examples of two of poter's forces
--
- The porter's five forces is to understand the compaetitive
forces at work in an organization.
- The porter's five forces include --
- Bargaining power of buyers
- bargaining power of supplier
- Threat of new entrance
- Threat of substitutes
- Rivalry in existing competitors
- These five forces help to understand your industry of interest,
identify opportunities and risks, distribution of profit within
company, identyfy attrative and less attractive markets, anticipate
changing trends.
- Real world example 1 -- Bargaining power of supplier
--
- Suppliers make a larger profit margin comparing to
companys. Suppliers sell directly to end users and aslo to the
companys.
- for example hotels sell their room to travellers and
also they wholesale their room to the likes of expedia proding them
discount.
- Customer's switching barriers -- High
switching cost include- pod coffee machines, inject printers, game
consoles to end users.
- Some smartphones are switching from android to apple. the
switching cost of apple's from from one vendor to another vendor
may considered high, but they are one off cost design and
integration.
- Real world example 2 -- Threats of new entrants
--
- If company want to brand their product they need large
capital cost, advertising and creating product demand, which limits
entry of newer players in sports market.
- But existing companies in sports apparel could enter in
performance apparel market in futrure.
- After all the analysis completion, the implementation strategy
are used for competetive advantage.
- The main objective of the company is to increase profit by
redusing costs and charging companys standard price.
- The company select niche markets to sell their
product. which requires understandings of market place which
include seller, buyer and competitors.