Assignment on Porter’s 5 Forces

Instruction Details

Porter’s 5 Forces (#1 and #2) Linked to YOUR Company

Discussion Topic

Industry Analysis Draft of 2 of Porter’s Five Forces — Use Monroe Library (Business Insights), Additional Readings from Materials Provided on BB including, But Not Limited To, HBR Michael Porter article, Videos on BB, Investopedia 12 Application Examples, Purdue University Industry Analysis Assessment, and Electronic Databases.

Porter’s Five Forces is a framework for analyzing the attractiveness and profitability of an industry (Porter, 2008).

Based on the following five forces, answer the questions connected with each force and related to the company that you have chosen to study. FIRST, DEFINE THE FORCE according to Porter’s HBR article. Be sure to CITE (in-text citations) the appropriate source linked to the information provided. Provide References (APA 7) at the end.

1) Rivalry among existing competitors (DEFINE According to Porter)– (a) Number and names of major competitors (approx 4-5), (b) Industry and Company Growth Rate, (c) Entry barriers, (d) Access to distribution, (e) Differentiation, (f) Fixed costs vs. variable costs

(g) Rivalry = High or Low – possibly moderate (Explain why)

2) Threat of New Entrants (DEFINE According to Porter) — (a) Entry barriers — government policies/regulations (b) Access to suppliers, (c) Distribution channels–access to, (d) Obstacles that deter new competitors from entering the industry, (e) Threat of New Entrants = High or Low – possibly moderate (Explain why)

3) Threat of Substitute Products and Services (DEFINE According to Porter) — (a) What is the availability of other products that a customer can purchase from outside the industry? (b) What is the buyer’s propensity to substitute? (c) Threat of Substitute Products/Services = High or Low – possibly moderate (Explain) (d) Consumer switching cost = high or low? (Explain why)

4) Bargaining Power of Suppliers (DEFINE According to Porter) — (a) Differentiation of inputs, (b) Switching costs of suppliers and firms in industry, (c) Threat of backward integration by firms in the industry, (d) Availability of substitute suppliers (e) Bargaining Power of Suppliers = High or Low – possibly moderate (Explain why)

5) Bargaining Power of Buyers (Customers) (DEFINE According to Porter) — (a) When are the customers in an industry powerful? (b) Ability to backward integrate, (c) Switching costs, (d) Bargaining leverage, (e) Buyer sensitivity to changes in price, (f) Bargaining Power of Buyers (Customers) = High or Low – possibly moderate (Explain why)

 

Instructions: Please post your response, which should include several informed and well written sentences (PER QUESTION). Please include statistics. Then, respond to the posts of two (2) classmates. Please cite your scholarly source(s) within the paragraph(s). Be sure to CITE (in-text citations) the appropriate source linked to the information provided. Provide References (APA 7) at the end.

 

 Sample Answer

1. Rivalry among existing competitors: This force represents the intensity of competition among established players in an industry. In the tech hardware industry, major competitors such as Company A, Company B, Company C, and Company D contribute to a highly competitive landscape. The industry and company growth rate are relatively high, driven by technological advancements and increasing demand. Entry barriers are considerable due to substantial initial capital requirements, strong brand loyalty, and the need for continuous innovation. Access to distribution channels might be challenging for new entrants due to established relationships and control by major players. Product differentiation is moderate, with companies offering unique features and branding. Fixed costs in this industry, including R&D and marketing, are high. Variable costs might be more manageable. Overall, the rivalry among existing competitors is high due to a fast-growing industry, strong barriers to entry, and significant fixed costs.
2. Threat of New Entrants: This force focuses on the ease or difficulty of new companies entering the industry. In the tech hardware industry, entry barriers are considerable. Government policies and regulations regarding quality standards, patents, and intellectual property rights make it challenging for new entrants. Access to suppliers might be limited due to established relationships and bulk purchasing advantages of incumbent companies. Distribution channels are controlled by existing players, posing a challenge for newcomers to secure access. Consequently, the threat of new entrants is low due to high entry barriers imposed by stringent regulations, limited supplier access, and controlled distribution channels.
3. Threat of Substitute Products and Services: This force evaluates the potential for customers to switch to alternatives. In the tech hardware industry, customers have various substitute products available from outside the industry, such as software solutions or alternative technologies. The buyer’s propensity to substitute depends on factors like price, features, and compatibility. The threat of substitute products/services is moderate due to the availability of alternatives and varying buyer propensities. Consumer switching costs might be high due to the need for retraining or compatibility issues, depending on the product or service.
4. Bargaining Power of Suppliers: This force examines how much control suppliers have over the industry. In the tech hardware industry, suppliers might hold significant power based on their ability to differentiate inputs, potential for backward integration, and availability of substitutes. However, with the dominance of established tech giants, supplier power could be moderate, given the diverse supplier base and the ability of companies to switch between suppliers.
5. Bargaining Power of Buyers (Customers): This force assesses the influence customers have in the industry. Customers might be powerful in the tech hardware industry, particularly if they possess the ability to backward integrate or if there are low switching costs. Buyer sensitivity to price changes and bargaining leverage could vary based on the product or service offered. The power of buyers can be considered moderate due to varying buyer behaviors and the diverse range of products in the market.