Chapter 3 activit y

Discussion question: it is all about the porter’s generic business

strategies

Explain the industry rivalry of porter ’s five forces analy sis on your own.

THE THREATS OF NEW ENTRANTS. It considers how easy for other possible
competitors to enter your market and threatens your company’s position. An
industry with strong barriers to entry is in of advantage since the company would
be able to charge higher prices and negotiate better terms. But if competitors can
enter your market with little money with little money and effort, you will need to
adjust your strategy to handle any potential rivals.
THE THREATS OF SUBSTITUTE. In this force says that you need to determine the
likelihood if your customers will stay on patronizing your products or will replace
that product of yours with an alternative one which would solve the same needs.
BARGAINING POWER OF SUPPLIERS. It analyzes how easy to supplier could
increase their prices and of course will soon affect your cost of sale. The fewer
supplier, the more company will depend on supplier, this then result that the
supplier has more power and can drive up input costs.
BARGAINING POWER OF BUYERS. It says that you also need to determine
whether buyers have the power to drive your prices down. The more customers
you have , the more power you retain.
INDUSTRY RIVALRY. It is largely affected by the four previous forces. You need to
look at the number and strength of your existing competitors.