Question

Question 1:  Identify the five competitive forces (Porter's Five Forces) that determine industry profitability.  Are some industries more profitable than others?  If so, give an example of a profitable industry and a not-profitable industry. 

Question 2:  Choose a health care related industry.  Analyze the industry in terms of Porter's Five Forces. 

Answer 1

Question 1: Identify the five competitive forces (Porter's Five Forces) that determine industry profitability. Are some industries more profitable than others? If so, give an example of a profitable industry and a not-profitable industry.

• Suppliers power
• Buyers power
• New entrant
• Barriers to entry
• Rivalry between existing companies

Yes, some industries are more profitable than others

Example- Amazon and e-Bay belong to same industry, but Amazon is more profitable than eBay

Question 2: Choose a health care related industry. Analyze the industry in terms of Porter's Five Forces.

Fortis Hospitals

1. Buyers Power- Due to increasing per capita income of customers, they can afford foreign hospitals with better services, Thus this force has high impact on Fortis
2. Supliers Power- Due to relaxed government policies, there has been reduction in import duties on medical equipment's, Which eventually is beneficial for hospitals
3. Threat of new entrants- ?reformed government healthcare policies are trying to attract both domestic as well as foreign investment
4. Threat of substitutes- Alternative medicines like Homeopathy, Osteopathy, Physiotherapy can pose damage to this industry
5. Rivalry- Due to many existing health care related industry in country, there is always tension between them