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Porter's Five Forces
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Topic: Five Forces Analysis
Sort Desciption: Five Forces Analysis assumes that there are five important forces that determine competitive power in a. situation. These are:- ...
Content Inside: Porter's Five Forces Assessing the Balance of Power in a Business Situation Why use the tool? The Porters Five Forces tool is a simple but powerful tool for understanding where power lies in 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 youre looking to move into. With a clear understanding of where power lies you can take fair advantage of a situation 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 businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations. How to use the tool: Five Forces Analysis assumes that there are five important forces that determine competitive power in a situation. These are:- 1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven 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 and ...
