Force 4: Buyer Power Buyer power is one of the two horizontal forces that influence the appropriation of the value created by an industry (refer to the diagram). The most important determinants of buyer power are the size and the concentration of customers. Other factors are the extent to which the buyers are informed and the concentration or differentiation of the competitors. Kippenberger (1998) states that it is often useful to distinguish potential buyer power from the buyer’s willingness
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Porter’s Five Forces A competitive strategy must meet the opportunities and threats inherent in the external environment; it should be based on an understanding of industry and economic change. Porter identifies five forces that shape every industry and which determine the intensity and direction of competition and therefore the profitability of an industry. The objective of strategic planning is to modify these competitive forces such that the organization’s position is improved. Management
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Module Code: PICS01C Student Number: 7305-272-8 Due Date: 15 March 2011 [pic] a) Five-forces diagram for analysis of the retail car industry in the greater Johannesburg area 1. Competitive Rivalry Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include: • The number and size of competitors • The rate of industry growth • Differentiation and switching costs • Fixed costs or perishable products
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The five competitive forces (Porter’s framework) as applied to this industry McDONALD’S 1. Threat of substitute products Low-Moderate – Availability of the MCD products – Choose MCD for Easting and Entertainment – Narrows Threat of Substitutes due to introduction of local taste products. 2. Threat of new entrants HIGH – Regulation of Limit – Easy Access Market and Low start up cost – Example of SubWay’s market penetration 3. Intense rivalry among existing players HIGH
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Five forces framework is proposed by Michael Porter. It draws upon Industrial Organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. 1. Competitors In current the main competitors of Tsingtao beer are Budweiser‚ YangJing‚ Blue
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Five Forces analysis of the Construction Industry in Sweden “The authors conclude that the less competitive a market environment‚ the higher will be the amount of corruption by giving public servants the incentive to extract some of the monopoly rents through bribes.” (Lambsdorf‚ 1999) Industry background: The Swedish construction business consists of four main actors namely JM‚ NCC‚ PEAB and Skanska that historically have had exclusive rights to bid on large-scale governmental projects
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5 forces of Porter The 5 forces of Porter are named after Michael E. Porter. This model classifies and examines the competitive forces that characterize every single industry plus it helps to give a clear understanding of what the strengths and weaknesses are of each type of industry. In addition to this‚ the 5 forces of Porter were mainly designed as a response to the famous “SWOT Analysis”. These 5 forces are the following: 1. Competition in the industry 2. Potential of new entrants
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PORTER’S 5 FORCES Porter’s 5 forces model allows to analyse the factors outside the Cruise industry that influence the nature of Carnival competition within it‚ the forces inside the Cruise industry that influence the way in which Carnival compete‚ and so the company’s likely profitability. With an understanding of where power lies‚ Carnival can take advantages of a situation of strength‚ improve a situation of weakness and avoid taking wrong strategies. Porter has identified five competitive forces that
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Assignment 1: Porter’s Five Forces Analysis L(Deia J. McNeal Strayer University Companies not only have to be able to survive but also thrive as a lucrative business in today’s market. In order to gain the ability to survive and thrive‚ as well as‚ establish longevity‚ companies must create a competitive advantage. In this instance‚ the industry is the desktop computer. For the sake of the analysis‚ I will call the company seeking to enter the desktop computer industry -- Plum. Plum Computers
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Reading 32 – The Five Competitive Forces That Share Strategy ------------------------------------------------- Date: April 6‚ 2013 Porter’s Five Forces Forces | Description | Notes | Threat of New Entrants | - Likelihood of new entrants emerging to alter the competitive landscape- Depend on size of barriers to entry- Higher the barrier‚ weaker the threat‚ and greater the pricing power of existing participants | - Econ of scale- product differences an brand identify that will deter customers
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