Strategy: A Fundamental Element in an Organization's Performance

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.

Porter’s five forces model is a tool that simple but powerful that help business people understand the relative attractiveness of an industry and the industry’s competitive pressures. Porter alluded to these forces as the micro environment, to balance it with the more broad term macro environment. They comprise of those strengths near an organization that influence its capacity to serve its clients and make a benefit. An adjustment in any of the forces ordinarily require a business unit to re-evaluate the market place given the general change in industry information. The general business engaging quality does not mean that each firm in the business will give back the same benefit. Buyer powers, supplier power, threat of substitute product and

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.

At its core, Porter’s 5 forces describes a firms overall ability to compete in a market. We discuss our analysis of the 5 forces and how they affect SAS Corporation and its stakeholders. Please examine Figure 1.1 to view a diagram that depicts the 5 forces.

2. How Porter's Five Forces of Competition impact the company Porter set out his famous Five Forces model in chapter 1 of his 1980 Competitive Strategy: Techniques for Analyzing Industries and Competitors, which has now become the dominant paradigm for the "Structural Analysis of Industries." The model places supply chain forces on the horizontal access and market structure vertically above and below industry competition, which they all point to as the center of potential profitability (Hitt, Ireland and Hoskisson,

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

In the article, “The Five Competitive Forces that Shape Strategy,” Michael Porter argues that the five forces are an important element for managers and investors in the business industry. Porter stated that it is important to “understand the competitive forces, and their underlying causes” which many companies will use to determine if they will gain profit or not (Porter 80). Companies determine their profitability of the industry through the level of the force that they face. For instance, when the forces are favorable, most companies will be profitable. Porter gives a detail description of the five forces and explains the importance of each force. The five forces are the threats of new entrants, the power of the buyers, the power of the suppliers, the threats of substitute for products or services, and the rivalry among existing competitors. Porter believes that “a company strategist who understands the competition extends well beyond existing rivals will detect wider competitive threats and be better equipped to address them” (Porter 93). In other words, when strategists understand the different forces it will benefit them to make better decisions and to be ready to face the different challenges between competitors. In the article, Porter’s main goal is to present the importance of the five forces to the audience.

The analysis of the Porters five forces are very important to business entities. Based on the analysis a business can evaluate their current position and positions that they plan to progress towards as it relates to the industry they are operating in.

Porter’s Five Competitive Forces Analysis is a framework developed by Michael E. Porter of Harvard Business School for study of industry analysis by analyzing five competitive forces which define industry and its business strategy. These five competitive forces determine the competitive advantages, disadvantages and attractiveness or profitability of industry.

The Porter’s analysis is a powerful tool in the strategy management. It helps to make decisions based on the external environment and the internal factors and to design the long-term goals of the company. Porter’s analysis mainly deals with the external environment of the firm which means the macro environment external to the company. The five forces of PORTER’S analysis includes

Strategy can be defined as being different from one’s competitors, finding the race to operate and accomplished it. According to Michael Porter (1996), while becoming better at what you do is desirable, it will not benefit you in the long run because it is something other competitors can also do. Strategies for organizations are originally developed by Michael E. Porter in 1979 by introducing the five forces model. A company can identify the industry profitability and attractiveness by analyzing the five forces of Porter (Johnson et al., 2008). And then a reasonable strategy can be set up in line with the strengths and the weakness of an organization is able to create a plan for a stronger position for the organization within its

Porter’s five forces are used to determine the competitive intensity and attractiveness of a market. These are close forces that affect a company’s ability to make a profit and serve customers. If any of these forces change, a company must reassess its marketplace. The five forces include: the threat of substitute products, the threat of the entry of new competitors, the intensity of competitive rivalry, the bargaining power of customers and the bargaining power of suppliers.

Michael E. Porter, associate professor published the article titled “How Competitive Forces shape Strategy” in Harvard Business Review in 1979. This article is retitled as “The Five Competitive Forces That Shape Strategy” and published in Harvard Business Review in 2008. Michael E. Porter developed the model of Five Competitive Forces which is defined as “Competitive Strategy – Techniques for Analyzing Industries and Competitors”. It has become a main device for analyzing an organizations structure in strategic practices.

Before understanding “how” we must know “what” Porters Five Forces model really is (Michael E. Porter, 2008). Company strive to secure a competitive advantage over their rivals, I mean who doesn’t want to be the best? Although the intensity of rivalry varies within each industry and these differences can be important in the development of strategy, but rather the five forces (Porter, 2008) being a strategy of any sort, it acts a framework in securing a strategy. The only time where strategy is irrelevant, would be when you have no competitors where ultimately the environment is a monopoly, or when you have a ton of money to throw around and waste. But

Internal rivalry: Porter believes that the power and size of market rivals goes a long way to show the strength a business. If a firm has a much larger market share then any of its market rivals it may not incur as much competition on price or non-price dimensions of the product/service in question and therefore will be a much more powerful business compared