The Five Forces analysis

STRATEGIC MANAGEMENT

This unit will underscore that firms must identify the market in which they compete. It is not enough to identify competitors, but a strategist must also understand the entire competitive environment. Individual firms will makes decisions based not only on direct competitors but other factors that influence key business choices.

There are several tools to understand how the environment affects business decisions. The Five Forces analysis is a frequently used tool to diagnose the competitive environment for a firm. This business strategy development outline was created in 1979 by Michael E. Porter, who is the Bishop William Lawrence University Professor at Harvard Business School. His model discusses the five forces that determine competition and the industrial profitability of the market are: rivals, barriers to entry, suppliers, substitutes, and buyers.

Read Chapter 5: Strategizing, Section 5.5: “Developing Strategy Through External Analysis” in Principles of Management.

PART 1:

Please answer the following questions:

  1. Pick any of the Five Forces and describe its key attributes. Provide an example of when this force was particularly strong in a given situation
  2. Is the force you selected stronger or weaker in highly dynamic markets? Why?
  3. What effect can government regulation have on each of these forces in your own country?

Please write an essay of complete and well composed paragraphs (250 word minimum for the entire essay) Be sure to use in text citation and provide references for your sources. Wikipedia is not a source.

PART 2:

Identify and list each of the Five Forces. You may want to do this using a visual aid, like a chart. Pick any organization you are familiar with and describe its overall competitive environment using each of the forces. Analyze how each of The Five Forces affects the organization and how each force may affect the ones. Evaluate which force is the strongest and why. Which is the weakest?

Prepare a two page (double-spaced) essay. The paper should be 12-point font, Times New Roman, be at least 500 words, and include a final source list.

PART 3:

Consider the following questions for reflection:

How effective are generic strategies? Should they be specifically tailored to each organization?

Please write an essay of complete and well composed paragraphs (250 word minimum for the entire essay) Be sure to use in text citation and provide references for your sources. Wikipedia is not a source.

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