Question

1.) Briefly outline and describe the five competitive forces that shape strategy. Which competitive force is the strongest? Why?

Your answers will be short essays and should be three full paragraphs or longer.

Answer 1

The five competitive forces also known as Porter's 5 competitive forces are the factors available in the market that is extensively responsible in shaping your business strategy in the external environment. These forces are the unique and have their own significant in the market which is thoroughly used by every organisation analyse the competition and the strategies of various input.

The 5 Types of Business Competitive Forces are:

Existing Competition: Exisiting Comepetition refers to the competition which prevails in the market at the particular point or period of time. All the competitors which are there to compete with your product and strategies in terms of quantity, quality or name are termed as the existing competition.

New Entrants: Apart from the existing comepetition, a firm also have a threat of the new entrants in the market. If any business sees the potential of growth in any particular market, he would enter the market to have more profit for his share. Thus, new entrants or potential businesses also decide the role for the development of your strategies.

Subsidies: Subsidies refers to that product or services which could be used in place for your product. For example, people might use tea if coffee is not available. Thus, the amount of subsidies increasing would affect your business and its growth opportunities.

Supply Power: The Supplier power is the power a supplier has in the market and for the organisation. The resources he provides, te quality he gives and the price he sets is the one which can affect the working of the organisation

Consumer Power: At last, consumer power refers to the power which the consumers have for availing the product or service. Their preferences, demand, likes and dislikes makes the consumer power for the organisation a significant factor.

Out of all these factors mentioned above, I believe that consumer power is one of the most influential and strongest power. As we all know, the consumer is the most important element in the market. Everything in the market works because of what is being demanded by the consumer on the first hand. Thus, the power resting with them is priceless and greatly affects the strategies and working of the organisation.