Q1: Why among the forces of the Porter's model-some are considered as strong and

some as weak and some as moderate in case of Mcdonalds? Explain with

examples. 

Ans.1
Porter’s five forces analysis gives insights about the external factors influencing the
company’s success. This forces in environment can affect profitability of an industry at
different levels i.e., strong (need to prioritize), moderate(considerable), and week (not need
to prioritize).
So, it is good to prioritize the major issue which should be resolve early.
In the case of MacDonald which was a fast food restaurant industry. The external issues of
competition, consumers, and substitutes, is higher as compared to other forces of
bargaining power of suppliers and the threat of new entrants.
For example:
- Strong Force
1. In this industry, the large no. firms with aggressiveness of low cost such as Wendy’s
and Burger King which easily help customers to switch over there, which increases
the intensity of competitive rivalry, therefore this competition force is strong or the
main issue.
2. Low switching cost, large no. of providers, and highly availability of substitute, this all
factor enhances the bargaining power of customers, and they easily find other best
offer, so the company need to work in this force initially else they easily get out of
the industry.
3. Artisanal food producers and local bakeries are the concern substitute which reduce
the customers of MacDonald, due to customer satisfaction with high performance-
to-cost ratio. So, substitute is another major issue, and need to resolve to survive
longer in this industry.

- Moderate Force
4. Threat of new entry is not big issue initial and the company can work on this force
latterly, because empowers a new business for new entrants is not an easy task to
come over the existing brand, so it still considerable,

- Week Force
5. Large no. of suppliers, is not an issue for the company, because the company will not
face a shortage of supplies, due to availability of suppliers, and at the same time, the
bargaining power of suppliers is not that high, which need to be concerned.
Q2: Why among the forces of the Porter's model-some are considered as strong and
some as weak and some as moderate in case of Apple Inc?Explain with examples.

Ans.2
Porter’s five forces analysis gives insights about the external factors influencing the
company’s success. This forces in environment can affect profitability of an industry at
different levels i.e., strong (need to prioritize), moderate(considerable), and week (not need
to prioritize).
So, it is good to prioritize the major issue which should be resolve early.
In the case of Apple Inc. which was a technology industry. The external issues of
competitive rivalry and the bargaining power of buyers, is higher as compared to other forces
of substitutes, bargaining power of suppliers and the threat of new entrants.
For example:
- Strong Force
1. Due to low price of other brand with aggressive advertisement and rapid innovation,
in this industry leads to tough competitive rivalry, which was the major
consideration, by the way apple have their own iOS, but the majority app are
available on both (iOS & android) platform , which makes the rivalry tough through
software side too.
2. Switching to other brand is easy due to low cost, and with the availability of
comparative information, customer can be switch on their satisfaction which
enhance the bargaining power of customers as another major issue.

- Moderate Force
3. To compete with apple Inc., require high capital & high cost of brand development
which will be risky, so this is not a major issue but the capacity of potential entrants
like google and Samsung, needs to be consider.

- Week Force
4. Due to global size of supply chain, & the brand value of apple Inc. the shortage of
this supplies will not have to face, at least for a large period. So, the bargaining
power of suppliers will not high, and need not concern much about it.
5. Due to low performance of substitute, and less features as compered to apple
products, the issue of substitute is not a big issue, if apple keeps work on its basic
principle