Analysis Of The Book ' Pablo Picasso 's ' Competitive Advantage Creating And Sustaining Superior Performance ' By Michael E. Essay

The task instruction is: Analyze Company G’s competitive environment utilizing Porter’s Five Forces Model of competitive forces. While headings below may provide some guidance for how to organize the paper, please refer to the recommended text (index topic: “Porter’s 5 forces model”), the learning community, and recommended web sites. As you will see from the reading, Porter’s 5-forces is a way to examine threats to a company’s success – which was competition imposes.

This analysis is conducted on the Porters Five Forces theory that is crucial for effective strategic decision-making, the five forces that shape industry competition are:

According to Porter’s competitive forces model, exist five major forces, which managers should analyze, and strategies developed for the company to increase their competitive edge. They are the threat of entry of new competitors and of substitute products or services, the bargaining power of suppliers and customers (buyers), and the rivalry among existing firms in the industry.

As we begin to strategically plan for our business, it is important for us to take a deep dive into our competitive environment to understand where we are strong competitively and where we are weak competitively. An analysis of the forces driving industry competition using M.E. Porter’s Five Forces Model will assist us in determining where the power lies in a business situation as we begin to plan. We must understand how they work in our industry and how they affect our particular situation. Whatever the collective strength of these forces is, our job as the strategists of the organization is to

Porter's five forces framework is a model of competitive industry structure. These are the threat of entry of new competitors, the threat of substitutes, the bargaining power of buyers and of suppliers and the rivalry between the existing competitors. Where these forces are intense, below-average industry performance can be expected; where these forces are mild, superior performance is common. (Jobber, 2007).

Competitive advantage(CA) is an advantage competitors gain by providing or offering customers or consumers greater value for their money through product and service differentiation or through lower prices. Maintaining competitive advantage is crucial to many businesses or organizations' success in order to survive in the market. Competitive advantage is characterized by superior performance which could be an attribute to outperform the competitors whether current or potential; or gaining a higher market share in a particular industry thereby ensuring market leadership; or ultimately, maximization of profit.(JOBBER 2010)

The Porter’s five forces of competition framework were first established in the year 1979 by Michael E Porter with the aim of facilitating the assessment and the evaluation of the strength of competition and state of a business

Porter's Five Forces can be applied to particular companies, market segments and industries with the step-by-step analysis of market structure and competitive situation. First of all, when implementing this module in organizations, it is necessary to determine the scope of the market to be analyzed. Following, all relevant forces for this market analyzed and key forces are identified (Gerry and Kevan, P.117). Actually some organizational strategy and the longer-term goals are mainly based on or consistent with the key forces. Hence, it is not necessary to analyze all elements of all competitive forces with the same depth. Moreover, the key forces in the competitive environment will vary in different industry. Different forces take on prominence in shaping competition in each industry (Porter,

Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).

In 1980, Michael E. Porter, of Harvard University, wrote a book called Competitive Strategy: Techniques for Analyzing Industries and Competitors. The purpose of the book was to discuss his “Five Forces Model of Competition” and expose students and businesses alike to his ideas on policy and strategy (Porter, 1980). The external analysis of industry, competition, and the general external environment is based on Porter’s Five Forces Model of Competition.

One of the greatest artist Pablo Picasso once said, “Action is the foundational key to success”. Well, we all agree with this quote, but there are many variety of factors that also implies in aspect of life. In the field of business, one of the key elements that ultimately controls the destiny of an organization, is their competitive advantage in a particular industry. The competitive advantage is defined as “an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices”("Competitive Advantage | Business."). In order to deeper understand of competitive advantage in a firm, I chose to read the book “Competitive Advantage

Porter’s five forces is a framework, which was developed by Michael Porter of Harvard Business School in 1979, was widely used in different industries for structural analysis and corporate strategy formulation (Wu, 2012). Porter’s five forces model is considered to be a basic idea to analyze the rules of competition in an industry and stress the important elements for the purpose of achieving a long-term competition attractiveness (Wu, 2012). The main purpose of this essay is to explain how Porter’s five forces framework for industry analysis determine the competition attractiveness of an industry through a case

Increasingly, firms find themselves, either by design or circumstances, operating in business environments fraught with unprecedented, unparalleled, unrelenting, and largely unpredictable change. Retaining competitive advantage is a constant preoccupation for all companies. Millions of words have been written purporting to identify the principles and practices most likely to enable firms to gain competitive advantage and, thereby, enjoy superior profit margins. Despite all this study, management remains a testing ground where theory, experience, judgment and, sometimes, luck play a role.

Nowadays, organizations is facing rapid change to the business environment where it becomes more complex than it were before. Indeed, these situation means that businesses need to find strategy to analyzing the implications of these changes and modifying the organizations reaction itself towards these situation. The strategies that the organization will apply also require gaining a complete understanding of the external environment of the organization. While understanding the macro-environment of the business is important, organization also need to have great understanding of the competitors and the impact they will bring to the organization (Dobbs, 2014). In 1979, Michael E. Porter, a Harvard Business School student introduced five key forces that determined the essential appeal of a business sector in a long run (Schachter, 2012). Porter’s Five Forces is a framework that analyzes and identifies strategy of an industry, and also determines the weakness and strength of an industry, where the activities of the competitors also involved. Porter’s Five Forces is cover understanding strategy of bargaining power of supplier, bargaining power of buyer, competitive rivalry, threat of substitution, and lastly threat of new entry. In addition, by having good understanding where the power rely on, businesses may take advantage by gaining strength or improve the weakness and evade taking wrong decision. Porter’s Five Forces will help organizations to define the market properly and

Porter’s five forces framework is a framework to analysis the level of competition in an organization and business strategy development. It illustrates upon industrial organization economics to derive 5 forces that find out the competitive intensity and therefore attractiveness of an industry. It has been applied to a diverse range of obstacles, for helping different types of organization increase their profitability. There are different opportunities and treats involved. In the following paragraph, Porter’s five forces framework is illustrated and briefly provide how five forces company’s profit potential.