Explain Michael Porter’s Five Forces Model

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The five forces model developed by Michael Porter has been considered as a milestone in business strategies where buy the model helps the company to analyse the competition existing in the industry. This investigation helps the company to develop corporate strategies in accordance with the conditions in the market. The model seeks to explore five competitive forces that are able to influence the market. Collectively these forces are considered as the micro environment.

Themodel is developed for every industry separately because every industry has different micro environment. These forces include competitive rivalry, threat posed by new entrants, availability of substitute that also pose a threat, the bargaining power possessed by the buyers, and lastly the suppliers bargaining power. Together these forces determine the competitiveness of a particular market. Market with many substitutes, easy entry of new forms and intense competitive rivalry make some market competitive.

Rahul Sunny answered 1 year ago

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