Porter Five Forces
1.0 INTRODUCTION
In today 's dynamic and competitive business environment, survival, growth and profitability are the essence goals of all industries. Nowadays, Porter 's Five Forces model is currently being adopted as the powerful management tool of choice by many organizations. The essence of this model is that it can help senior managers to make right decision and build and sustain competitive advantages in the organization level. This document presents the overview approach of Porter¡¦s five forces framework across organizations. And critically evaluation of porter¡¦s five forces model mainly focused on identifying the benefits and limitations of it and exploring some perceived issues or problems regarding implementation. Finally the analysis of the five competitive forces of Orange Juice From Concentrate industry in KSA is concluded in the last section of this document.
2.0 MICHAEL PORTER¡¦S FIVE FORCES
2.1 Porter¡¦s Five Forces Model
The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on business managers are immediate because it determines the competitive rules and strategies managers are likely to use. Michael Porter has identified five forces that are widely used to assess the structure and competition of any industry (Anonymous. Module MN 7037/D. Strategic Marketing Management). Fig 1 summarizes Porter¡¦s five forces: Figure 1 Porter 's five forces source: Module MN 7037/D. Strategic Marketing Management
Together, the strength of the five forces determines the profit potential in an industry by influencing the prices, costs, and required investments of businesses¡Xthe elements of return on investment. Stronger forces are associated with a more challenging business environment (Backer, Michael. J. Marketing Strategy & Management).
2.1.1 Power of Suppliers
Any business requires inputs¡Xlabour, parts, raw materials, and services. The cost of
In today 's dynamic and competitive business environment, survival, growth and profitability are the essence goals of all industries. Nowadays, Porter 's Five Forces model is currently being adopted as the powerful management tool of choice by many organizations. The essence of this model is that it can help senior managers to make right decision and build and sustain competitive advantages in the organization level. This document presents the overview approach of Porter¡¦s five forces framework across organizations. And critically evaluation of porter¡¦s five forces model mainly focused on identifying the benefits and limitations of it and exploring some perceived issues or problems regarding implementation. Finally the analysis of the five competitive forces of Orange Juice From Concentrate industry in KSA is concluded in the last section of this document.
2.0 MICHAEL PORTER¡¦S FIVE FORCES
2.1 Porter¡¦s Five Forces Model
The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on business managers are immediate because it determines the competitive rules and strategies managers are likely to use. Michael Porter has identified five forces that are widely used to assess the structure and competition of any industry (Anonymous. Module MN 7037/D. Strategic Marketing Management). Fig 1 summarizes Porter¡¦s five forces: Figure 1 Porter 's five forces source: Module MN 7037/D. Strategic Marketing Management
Together, the strength of the five forces determines the profit potential in an industry by influencing the prices, costs, and required investments of businesses¡Xthe elements of return on investment. Stronger forces are associated with a more challenging business environment (Backer, Michael. J. Marketing Strategy & Management).
2.1.1 Power of Suppliers
Any business requires inputs¡Xlabour, parts, raw materials, and services. The cost of
References: Anonymous, Module MN 7037/D, Strategic Marketing Management, 12th Edition, Management Centre, University of Leicester. Backer, Michael J., Marketing Strategy & Management, 3rd Edition, Palgrave Macmillan. Hamel, Gary and Prahalad, C. K, Competing for the Future. Harvard Business School Press, April 1996. Hill, Charles and Jones, Gareth., Strategic Management: An Integrated Approach, 7th edition, Houghton Mifflin Company, Feb 8, 2006. Johnson, Gerry and Scholes, Kevan., Exploring Corporate Strategy, 6th edition, Prentic Hall, November 21, 2003. Pearce, John and Robinson, Richard., Strategic Management: Formulation, Implementation, and Control, McGraw- hill /Irwin, 2002. Porter, Michael E., Competitive Strategy, New ED edition, Free Press, January 19, 2004.