Porter's Five Forces E-Book

50MINUTES

• Herausgeber: 50Minutes.com
• Kategorie: Fachliteratur
• Serie: Management & Marketing
• Sprache: Englisch

Seitenzahl: 22

Veröffentlichungsjahr: 2015

Beschreibung

Understand competitive forces and stay ahead of the competition

This book is a practical and accessible guide to understanding and implementing Porter’s five forces, providing you with the essential information and saving time.

 In 50 minutes you will be able to: 

   • Understand the five forces that affect profitability and analyze each force in depth in relation to your company  
   • Analyze the intensity of the competition within an industry and how this affects your business
   • Increase or maintain your competitive advantage according to the analysis 

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Leseprobe

Porter’s five forces

Key information

Names: Porter’s five forcesUses: analysis of the competitive environment of an industryWhy is it successful? This model enables you to:understand the industry and the nature of relations between the various participants in the market in which the company operates;identify the performance and influence factors of the sector;evaluate how changes within an industry can affect its profitability.Key words:Competition: a significant aspect of a market characterised by the companies that are positioned there, fighting with each other to hold the largest market share.Competitive advantage: the value created by the company and perceived by the customers that differentiates it from other industry players and brings better profitability, a differentiation force for negotiation.Industry concentration: the power of certain participants in specific sectors. If only a few companies share the market, the industry is said to be concentrated.Profitability: the ratio between the initial investment and the financial results.Strategy: determining a set of actions to be taken and resources to be used in order to achieve the objectives initially set over the long term and to converge towards the creation of a unique and desirable position in a competitive environment.Transfer costs: also called ‘switching costs’, they are the resources that will be necessarily invested during the transition from one system/process/technology, etc. to another.

Introduction

Since all companies evolve in a competitive environment, differentiation has become paramount and sometimes vital. In addition to being constantly careful not to lose the market share already acquired for a strategic business unit (SBU), the company must continually reaffirm its differences to maintain and create its own competitive advantage.

Developed in 1979 by Michael E. Porter (born in 1947), a business strategy professor at Harvard, the five forces model allows business executives to anticipate trends within an industry and changes in competition in order to influence it by making strategic choices that will enable them to obtain or maintain a competitive advantage.

Definition of the model

The five forces model is an essential tool for understanding the competitive structure of an industry. This simple analytical tool is effective for identifying the competitors – in the broad sense – of a company, but also for understanding how they can reduce its ability to generate profit.

The complete analysis examines five forces: customer bargaining power, supplier bargaining power, the threat of substitute products, the threat of new entrants, and intra-industry competition. The first four elements operate independently from one another whilst intensifying the rivalry within the industry.