What is Porter's Five model? Explain and elaborate the use of this model.

Porter's Five Forces is a model or tool that helps in identifying and analyzing five competitive
forces that shape every industry and also helps in determining industry's weaknesses and
strengths. This is frequently used in identifying industry’s structure that coordinates to its’
corporate strategy. This was created by Harvard Business School professor Michael Porter, to
analyze an industry's attractiveness and likely profitability. He acknowledged that organizations
are most likely to keep a close watch on their rivals, but he encouraged them to look beyond the
actions of their competitors and examine what other factors could impact the business
environment. He listed five forces that make up the competitive environment, and which can
erode your profitability. These pertain to:

 Competitive Rivalry – The intensity of rivalry among established firms. This refers to
the number of competitors and their ability to undercut a company. The higher the
number of the competitors, along with the number of equivalent products and services
they offer, the lesser the power of a company. Suppliers and buyers tend seek out a
company's competition if they are able to offer a better deal or lower prices. Conversely,
when competitive rivalry is low, a company has greater power to charge higher prices
and set the terms of deals to achieve higher sales and profits.
 Risk of entry of potential competitors – the threat of new entrants to an industry can
possibly force current players to keep prices down and spend more to those customers
that retain. This brings new capacity and pressure on prices and costs, it puts a cap on
the profit potential of an industry.
 Bargaining power of suppliers – This pertains to how easily suppliers can drive up the
cost of inputs. It is primarily affected by the number of suppliers of key inputs of a good
or service, how unique these inputs are, and how much it would cost a company to
switch to another supplier. The fewer suppliers to an industry, the more probable a
company would depend on a supplier. As a result of this, the supplier would definitely
have more power and can drive up input costs and push for other advantages in trade.
On the other hand, when there are many suppliers or low switching costs between rival
suppliers, a company can keep its input costs lower and enhance its profits.
 Bargaining power of buyers – This refers to the ability of the customers to drive prices
down. It is affected by how many buyers or customers a company has, how significant
each customer is, and how much it would cost a company to find new customers or
markets for its output. A smaller and more powerful client base means that each
customer has more power to negotiate for lower prices and better deals. A company that
has more, and smaller independent customers will have an easier time charging higher
prices to increase profitability.
 Threat of substitute - Substitute goods or services can pose a threat especially if these
can be used in place of a company's products or services. Companies that produce
goods or services for which there are no close substitutes will have more power to
increase prices and lock in favorable terms. When close substitutes are available,
customers will have the option to forgo buying a company's product, and a company's
power can be weakened.
Being able to understand  Porter's Five Forces and its application to industries, can definitely
become a big help in enabling a company to adjust its business strategies for a better use of its
resources in order to generate higher earnings for its investors.
Please explain the PESTEL framework. 

PESTEL analysis pertains to a framework or tool that is used in analyzing and monitoring the
macro-environmental factors that may have a probable profound impact on an organization’s
performance. The letters stand for Political, Economic, Social, Technological, Environmental
and Legal.

 Political - These identify the extent to which government and government policy may
impact on an organization or a specific industry. Basically all the influences that a
government has on your business could be classified here. This would include political
policy and stability as well as trade, fiscal and taxation policies as well. Furthermore, the
government may also have a profound impact on a nation’s education system,
infrastructure, and health regulations. All these factors are needed to be taken into
account when assessing the attractiveness of a potential market.
 Economic – These are the factors that impact the economy and its performance, which
in turn directly impacts on the organization and its profitability. Factors include interest
rates, employment or unemployment rates, raw material costs and foreign exchange
rates. These factors may have a direct or indirect long-term impact on a company, since
it affects the purchasing power of consumers and could possibly change demand/supply
models in the economy. Consequently it also affects the way companies price their
products and services.
 Social - These factors focus more on the social environment and identifying the
emerging trends. This helps a marketer to further understand their customers’ needs and
wants. These factors are especially important for marketers when targeting certain
customers. In addition, it also says something about the local workforce and its
willingness to work under certain conditions.
 Technological - These factors pertain to the innovations in technology that may possibly
affect the operations of the industry and the market favorably or unfavorably. These
factors may influence decisions to enter or not enter certain industries, to launch or not
launch certain products or to outsource production activities abroad. By knowing what is
going on technology-wise, you may be able to prevent your company from excessive
spending on developing a technology that would become obsolete very soon due to
disruptive technological changes elsewhere.
 Environmental - These factors refer to the influence of the surrounding environment and
the impact of ecological aspects. With the rise in importance of Corporate Sustainability
Responsibility, this element has become more important. Factors include climate,
recycling procedures, water disposal, and carbon footprint.
 Legal - An organization must be able to understand what is legal and allowed within the
territories they operate in. They also must be aware of any change in legislation and the
impact this may have on business operations.

Please explain the SWOT analysis.

 SWOT analysis is a technique that is used in assessing the company’s Strengths,

Weaknesses, Opportunities, and Threats. Its primary objective is to help
organizations develop a full awareness of all the factors involved in making a
 business decision. Performing a SWOT analysis before committing to any sort of
company action is advisable, whether you are exploring new initiatives,
revamping internal policies, considering opportunities to pivot, or altering a plan
midway through its execution.

In reference to the previous numbers, kindly differentiate SWOT vs. PESTEL

In reference to what’s above, SWOT and PESTEL analysis are two

valuable tools that offer valuable and beneficial insights into a
company and its position in the world. These analyses are meant to
provide an objective look and the information that are needed in
order to make informed and mature decisions. The main differences between the
two is that a SWOT analysis only focuses on actions an individual can take internal to the business
environment, while the PESTLE analysis identifies the external factors that are mainly outside of the
company’s control.

Explain how important a vision and mission to a company.

1. Vision and mission are very vital to a company because these statements provide a
focal point that helps to align everyone with the organization, thus ensuring
that everyone is working towards a single purpose. This helps in increasing
the efficiency and productivity in the organization. It also defines the
purpose of the organization and instill a sense of belonging and identity to
the employees, this motivates them to work harder in order to achieve
success. The mission statement is pertained to as a “North Star”,
where it provides the direction that is to be followed by the
organization, while the vision statement provides the goal or the
destination to be reached by following this direction.

As a future manager, please explain the strategic management process and how do you see it
will benefit your company/business?

or the
Strategic management process is the continuous defining of the company’s strategy,
ongoing planning, monitoring, analysis and assessment of all necessities an
organization needs to be able to meet its goals and objectives. It is a vital
process that should be done, and I think that it will benefit my company by
giving direction not only to the organization but the employees as well. Aside
from this, it will also help in avoiding financial demise, improve the awareness
of external threats, understanding the competitor’s strategies more, and the
likes.
Explain how important a vision and mission to a company. In addition, kindly provide your
opinion how these relates to a company objective?