Question

In: Finance

Perform Porters 5 force analysis on ADP (Automatic Data Processing, Inc.)

Perform Porters 5 force analysis on ADP (Automatic Data Processing, Inc.)

Solutions

Expert Solution

Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. Porter Five Forces focuses on - how Automatic Data Processing, Inc. can build a sustainable competitive advantage in Business Software & Services industry. Managers at Automatic Data Processing, Inc. can not only use Porter Five Forces to develop a strategic position with in Business Software & Services industry but also can explore profitable opportunities in whole Technology sector.

Threats of New Entrants

New entrants in Business Software & Services brings innovation, new ways of doing things and put pressure on Automatic Data Processing, Inc. through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Automatic Data Processing, Inc. has to manage all these challenges and build effective barriers to safeguard its competitive edge.

Bargaining Power of Suppliers

All most all the companies in the Business Software & Services industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins Automatic Data Processing, Inc. can earn in the market. Powerful suppliers in Technology sector use their negotiating power to extract higher prices from the firms in Business Software & Services field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Business Software & Services.

Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on Automatic Data Processing, Inc. profitability in the long run. The smaller and more powerful the customer base is of Automatic Data Processing, Inc. the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.

Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Automatic Data Processing, Inc. operates in a very competitive Business Software & Services industry. This competition does take toll on the overall long term profitability of the organization.

By analyzing all the five competitive forces Automatic Data Processing, Inc. strategists can gain a complete picture of what impacts the profitability of the organization in Business Software & Services industry. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail Automatic Data Processing, Inc. 's managers can shape those forces in their favor.


Related Solutions

perform Porters 5 force analysis on ADP (Automatic Data Processing, Inc.)
perform Porters 5 force analysis on ADP (Automatic Data Processing, Inc.)
Automatic Data Processing(ADP) is the company. 1) A good place to start with an internal firm...
Automatic Data Processing(ADP) is the company. 1) A good place to start with an internal firm analysis is to catalog the assets a firm has. List the firm's tangible assets. Then make a seperate list of its intangible assets 1a.Then use the VRIO framework to identify the competitive postion held by your firm. Which, if any of these resources are helpful in sustaining the firms competitive advantage?
Perform a Porters 5 Forces Analysis on Teslas Industry (don't forget to define the industry)
Perform a Porters 5 Forces Analysis on Teslas Industry (don't forget to define the industry)
perform a 5 forces analysis for Ryanair
perform a 5 forces analysis for Ryanair
Automatic Data Processing has a beta of 2.67 and the expected market return is 0.16. If...
Automatic Data Processing has a beta of 2.67 and the expected market return is 0.16. If Treasury bills are currently yielding 0.03 percent, find the cost of capital for Automatic Data Processing (round your answers). none of the answers is correct 39.9% 27.5% 37.7% 34.1% Calculate WACC given the following information (BT means before tax). Total Value of Common Stocks (S) $1,000,000 Cost of Equity (common stocks, Ks) 22% Total Value of Preferred Stocks (P) $200,000 Cost of Preferred stock...
Porters Five forces Analysis for Microsoft Corporation need 5 examples and why used.
Porters Five forces Analysis for Microsoft Corporation need 5 examples and why used.
Do a basic industry analysis of your choice, use Porters 5 forces model for this industry...
Do a basic industry analysis of your choice, use Porters 5 forces model for this industry analysis, make sure and include some industry metrics and analysis.
Automatic Data Processing is the company. 1) Does your selected business have differentiated products or services?...
Automatic Data Processing is the company. 1) Does your selected business have differentiated products or services? If so, what is the basis for this differentiation from the competition? 2) Does your firm have a cost-leadership position in this business? If so, can you identify which cost drivers it uses effectively to hold this position? 3). What is your firm's approach to the market? If it segments the market, identify the scope of competition it is using. 4) Using the answers...
Please take the company Apple Inc. and perform a Financial Analysis using the available data for the most recent fiscal year
  Financial Statement Interpretation Please take the company Apple Inc. and perform a Financial Analysis using the available data for the most recent fiscal year (i.e. 12/31/17) and compare that year to the previous fiscal year (i.e. 12/31/16). Your analysis should include at least one analytical equation from each of the five sections of Financial Analysis listed below. · Liquidity · Asset Management · Debt Management · Profitability · Market Value In your analysis should include the following interpretations: 1....
Multivariate analysis Using the data provided, perform the following analysis: Determine the explanatory and response variables....
Multivariate analysis Using the data provided, perform the following analysis: Determine the explanatory and response variables. Run a multivariate regression analysis on all three variables. Interpret the results by answering the following questions: What is the calculated correlation coefficient? Do the sales figures correlate with the marketing expenditure and price? Comment on the coefficient of determination. What percentage of the response data can be explained by the explanatory variables? Determine the multiple regression line equation in the form: sales^ =...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT