Strategic Management is planning, applying and evaluating efficient decisions that will allow an organization to reach its long-term objectives.
Who is your competition? How are their actions in the marketplace going to affect your current bottom line and future planning? To answer those questions, you must analyze the competition.
Porter inthe five forces model looks at five specific factors that help determine whether or not a business can be profitable, based on other businesses in the industry. In that light, industry structure is what ultimately drives competition and profitability —not whether an industry produces a product or service, is emerging or mature, high-tech or low-tech, regulated or unregulated.
Competitive rivalry This force examines how intense the competition currently is in the marketplace, which is determined by the number of existing competitors and what each is capable of doing.
In addition, it looks at the number of suppliers available: The fewer there are, the more power they have. Businesses are in a better position when there are a multitude of suppliers. Bargaining power of customers This force looks at the power of the consumer to affect pricing and quality.
Threat of new entrants This force examines how easy or difficult it is for competitors to join the marketplace in the industry being examined.
Barriers to entry include absolute cost advantages, access to inputs, economies of scale and well-recognized brands. It looks at how many competitors there are, how their prices and quality compare to the business being examined and how much of a profit those competitors are earning, which would determine if they can lower their costs even more.
Under Armour faces intense competition from Nike, Adidas and newer players. Nike and Adidas, which have considerably larger resources at their disposal, are making a play within the performance apparel market to gain market share in this up-and-coming product category. Under Armour does not hold any fabric or process patents, and hence its product portfolio could be copied in the future.
Bargaining power of suppliers: A diverse supplier base limits bargaining power. Bargaining power of customers: Bargaining power of end customers is lower as Under Armour enjoys strong brand recognition. Threat of new entrants: Large capital costs are required for branding, advertising and creating product demand, and hence limits the entry of newer players in the sports apparel market.Using the Porters five + 1 forces model which is a powerful analysis tool, corporate managers are empowered to better analyse the current position of the industry in which they are operating in an easy to understand way which is well structured.
Porter’s five forces model Porter’s five forces model is an analysis tool that uses five forces to determine the profitability of an industry and shape a firm’s competitive strategy It is a framework that classifies and analyzes the most important forces affecting the intensity .
Porter's five forces model is an outline for the market analysis and business strategy development, It includes five forces that decide the competitive power and attractiveness of a market. Porter referred those forces affect its . The Impact of Information Technology on Porter Model of Competition Introduction Michael Porter’s competitive forces model is a well-known framework for analyzing competitiveness.
Five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in Swot Analysis And Porters Five Forces Information Technology Essay Walgreens pharmacies have integrated intellectual technology into every facet of its operation.
The ability to develop, implement, and analyze the effects of the IT has significantly increased pharmacy efficiency.