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In: Operations Management

We can use the generic strategies to combat four of Porter's Five Competitive Forces. The four...

We can use the generic strategies to combat four of Porter's Five Competitive Forces. The four are rivalry, threat, of substitutes, buyer power, and entry barriers. Can you explain the connection between business level strategies and these forces?

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Expert Solution

Connection between business-level strategies and four out of Porter's Five Competitive Forces

Strategy could be defined as 'a plan of action made to achieve the long term aim or goals'.

Porter's Five Force Model

And how these forces been connected to the business level strategies...?

1) Rivalry: A better understanding of the potential competitors in a market is quite essential to build a set of business strategies. Even if the newbies are entering the market with a new product or a substitute one, it is very important to analyze how much the market value as well as to identify the strengths and weaknesses of the competitor.

2) Threat: Also, the threats are possible to all the business in one way or another. For example the impact of Corona in the current business scenario.

3) Threat of substitutes: It is much interconnected with the rivalry because the threat to a newcomer to the market is first and foremost the one from the existing players or the market leaders as it's commonly said to be the internal threats.

4) Buyer power: Another considerable factor is 'Buyer Power'. For every business, the customer is the king and always expects something new than they normally get from the manufacturers, as the mind of humans is filled with insatiable needs and wants and that's quite unpredictable too. Understanding these needs and wants makes a product or the business much unique.

5) Entry barriers: 'It's pretty hard to play in the court than to enjoy the game'. Likewise, when entering into the market there's a lot of precautions and preparations needed and to be taken care of as important as to make something perfect for their customers.


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