Porter Five Forces in the Robotics Industry

I am going the review the Article "The Five Competitive Forces That Shape Strategy" written by Micheal E. Porter. This article was published in Harvard business Review in year 2008.

In 1980 and later in 1985 Michael Porter wrote two books. First one is “Competitive Strategy” and the second one is “Competitive Advantage” which are emphasized in explaining strategies which guides companies through analyzing themselves in their industries and by that analysis he guides them to choose the best strategy in order to be successful and achieve sustain competitive advantage their existing market. This paper focus on two of Porter's strategies that are “Five Force Analysis” and “Generic Strategies”. These strategies are still using by some of the company, but they are started to be replaced by new approaches. They became outdated for today’s highly competitive marketplace because they only focus on competing in existing market. In 2005, W. Chan Kim and

Porter's five forces analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. It draws upon industrial organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of an industry from the perspective of profitability. The five forces it focuses on are: competitive rivalry, supplier power, buyer power, threat of substitution and threat of new entry.

Robotics back in the 1900’s were considered are due to expensive equipment and programming systems until People started to make them to sell to others and become rich. The robotic industries started with

Rivalry among existing competitors takes many familiar forms, including price discounting, new product introductions, advertising campaigns and service improvements. High rivalry limits the profitability of an industry. The degree to which rivalry drives down an industry’s profit potential depends upon the intensity with which companies compete and on the basis on which they compete (Porter, 2008). Comparing company websites and business news articles on companies within the same industry provides the necessary insights to the level of competitive intensity. Reviewing trade associations can also provide key information into competition. Lastly, consolidating information from each of the prior Porter Forces provide insight into the overall intensity of competition.

Nowadays the term “robotics” is used to define a branch of technology that deals with design, construction, operation and application of robots (Oxford Dictionaries, 2015)

More companies are investing in robots. “Robots have moved upstream and can be used for filling, capping, sterilizing, high-speed picking and sorting, packaging and other activities” (Castaldi 38). This is cost saving for the company because the company will have fewer injuries, down time, and can move in a repetitive motion without being tired or bored. Robots can keep up with the high demand of orders and can handle any pallet size with ease. Robots are especially useful in critical climates that are not fit for humans for example, working in extreme cold or no

Michael Porter is a renowned economist and professor of Business Administration at the Harvard Business School, author of 18 books and more than 125 articles with topics that range from industry competition to economic development. Porter was born in Michigan and went on to study aerospace and mechanical engineering in Princeton from where he graduated first in his class and with high honors from both the prestigious societies Phi Beta Kappa and Tau Beta Pi, which he was also elected into. He is known as the “c” and is recognized worldwide for his take on competition and company strategy, many say that his work has redefined the thought process related to competition and economic development. Some of his most influential books include Competitive Strategy: Techniques for Analyzing Industries and Competitors, Competitive Advantage: Creating and Sustaining Superior Performance and Redefining Health Care: Creating Value-Based Competition On Results.

Michael Porter formed a basis that consists of five forces of competition. These five forces are meant to be a framework for diagnosing industry structure. Essentially, the idea is to explain the sustainability of profits against bargaining, and direct and indirect competition. The five forces that shape the strategy are,

In talking strategy for any company, Porter’s Five Forces Model is likely to come up. It has served as a strategic planning guideline for years. If a company is just starting out, they would have to analyze the model and apply it to themselves from every aspect. If a company is well established, the model can serve as points that need to constantly be revisited. In going global, the tool becomes invaluable. It still only serves as a guideline, but it delivers significant points that have to be examined in a different culture of diverse laws and governmental controls. The following paragraphs will describe Porter’s Five Forces Model, describe how it can assist in going global, and examine possible limitations

This model was articulated for the first time by Michael Porter in 1979 in his successful record-breaker book named “How competitive forces shape strategy” (Porter, p.78). Five forces are illustrated in following picture.

Gramazio and Kohler, share the Chair at ETH Zurich in Architecture and Digital Fabrication and talk about their experiences within the firm and share information they have learned from colleagues and employers. The two partners introduced the first multi- purpose fabrication laboratory based on the use of industrial scale robots. Their focus has been on the role of robotics in production and design. The design concepts currently in use and discussed in this book become more exploratory with robotics as these technological devices can quickly adapt and offer options both on a conceptual design level as well as a fabrication level. What architects may only have dreamed about previously, now become possible through the use of robotics. They discuss many of these changes that are appearing in Asia, such as the Future

Rivalry is identified and measured according to industry concentration. A low concentration indicates a competitive or “fragmented” market composed of many rivals, none having significant market share. (A large number of firms increase rivalry.) Conversely, a high concentration indicates less competition; a small number of large firms hold most of the market share. Product differentiation, avoiding excess productive capacity, segmentation, and industry-wide communication are effective means of combating rivalry. Ultimately, mergers or acquisitions with or of competing firms can be invoked.

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.

Nowadays automatic machines such as robots are extensively used in industrial environment due to their distinguishing features. Despite the fact that these robots are well developed there is always a room for improvement.