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Mkt Mgt Nokia

Mkt Mgt Nokia

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Published by: MOHAMMAD SAIFUL ISLAM on Jun 07, 2012
Copyright:Attribution Non-commercial


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Lecturer Faculty of Business AdministrationPremier University of Chittagong
Md.Saiful Islam ID: 0920113642
Md. Shadat Hossen ID: 0920113681
Md.Ahmedul Karim ID: 0920113706
Md.Amjad Hossain ID: 0920113667
Md. Yousuf Hero ID: 0920113666
Md.Tawfiqul Islam ID: 0818112722
Kazi Md. Badrudduza ID: 0920113637
Hossain Md Belal ID: 0920113659
Date of Submission: 05 Dec, 2011
Porter's five forces is a framework for the industry analysis and business strategydevelopment developed byMichael E. Porter of  Harvard Business Schoolin1979. It uses concepts developing, Industrial Organization (IO) economicsto derive five forces that determine the competitive intensity and therefore attractiveness of amarket. Attractivenessin this context refers to the overall industry profitability. An "unattractive" industry is onewhere the combination of forces acts to drive down overall profitability. A veryunattractive industry would be one approaching "pure competition".Three of Porter's five forces refer to competition from external sources. The remainder isinternal threats. It is useful to use Porter's five forces in conjunction withSWOT analysis(Strengths, Weaknesses, Opportunities, and Threats).Porter referred to these forces as the micro environment,to contrast it with the more general termmacro environment. They consist of those forces close to acompanythat affect its ability to serve its customers and make a profit.A change in any of the forces normally, requires a business unit to re-assess themarketplacegiven the overall changeinindustry information. The overall industry attractiveness does not imply thateveryfirm in the industry will return the same profitability.Firmsare able to apply their  core competencies,  business modelor network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low and yet individual companies, by applying unique business models, have been able to makea return in excess of the industry average.
Porter's Five Forces Include:– 
Three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical'competition: the bargaining power of suppliers and the bargaining power of customers.The model of the Five Competitive Forces was developed by Michael E. Porter in his book „ Competitive Strategy: Techniques for Analyzing Industries and Competitors” in 1980.Since that time it has become an important tool for analyzing an organizations industrystructure in strategic processes. Porter’s model is based on the insight that a corporatestrategy should meet the opportunities and threats in the organizations externalenvironment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Porter has identified five competitive forcesthat shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porter’s model supports analysis of the driving forces in anindustry. Based on the information derived from the Five Forces Analysis, managementcan decide how to influence or to exploit particular characteristics of their industry.The Porter's 5 Forces tool is a simple but powerful tool for understanding where power liesin a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're looking to move2
into. With a clear understanding of where power lies, you can take fair advantage of asituation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit.Conventionally, the tool is used to identify whether new products, services or businesseshave the potential to be profitable. However it can be very illuminating when used tounderstand the balance of power in other situations too.
How To Use The Tool:-
Five Forces Analysis assumes that there are five important forces that determinecompetitive power in a situation. These are:-
Supplier Power:-
The term 'suppliers' comprises all sources for inputs that are needed in order to providegoods or services. Here you assess how easy it is for suppliers to drive up prices. This isdriven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, andso on. The fewer the supplier choices you have, and the more you need suppliers' help, themore powerful your suppliers are.
Buyers Power:-
 Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes. Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of eachindividual buyer to your business, the cost to them of switching from your products andservices to those of someone else, and so on. If you deal with few, powerful buyers, theyare often able to dictate terms to you.
Competitive Rivalry:-
 This force describes the intensity of competition between existing players (companies) inan industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry What is important here is the number and capability of your competitors – if you have many competitors, and they offer equallyattractive products and services, then you’ll most likely have little power in the situation. If suppliers and buyers don’t get a good deal from you, they’ll go elsewhere. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.
Threat of Substitution:-
 A threat from substitutes exists if there are alternative products with lower prices of better  performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players.This category also relates to complementary products. This is affected by the ability of your 3

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