Industry Analysis: the Five Forces

Five Forces to examine the attractiveness of the industry structure we will first look at

All their suppliers range from small farming cooperatives to multinational corporations . They consider factors such as capacity, quality and cost when selecting companies to buy from. In addition, seek only to work with suppliers that can consistently meet standards and specifications and

This article has started revolutionary thinking about what are the different forces in addition to direct competitors that affect competitive strategy of an organization and how better understanding of industry structure and these forces, also known as " Porter 's Five Forces", derive organization 's strategy to achieve sustainability and higher profitability. Author has explained the other factors that contribute for industry structure like industry growth rate, technology and innovation, external factors, government & regulations and complementary products and services. Industry structure changes while responding to changes in competitive forces. Author also discussed the framework to perform industry analysis and avoid common pitfall while conducting analysis. In this review I will summarize five competitive forces explained by Micheal E. Porter and their implication on organization 's strategy. Further, I will discuss the relevancy of Porter 's five forces framework in current scenario.

But Firstly, we will start this part by talking about the importance of a deep analysis of the industry’s structure. A deep knowledge of the industry the company is in, is extremely important. The industry structure is unique and varies from industry to industry of course. It will determine the level of competitiveness and attraction of the industry. With the Five Forces model (Porter) and PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis, the organization will get a better understanding of the market will allow you to know the requirements for the possible creation of sustainable competitive advantages and take the right strategic decisions. According to Porter, to create an efficient competitive strategy, it is important to understand the rules of competition that determine market attractiveness.

As we begin to strategically plan for our business, it is important for us to take a deep dive into our competitive environment to understand where we are strong competitively and where we are weak competitively. An analysis of the forces driving industry competition using M.E. Porter’s Five Forces Model will assist us in determining where the power lies in a business situation as we begin to plan. We must understand how they work in our industry and how they affect our particular situation. Whatever the collective strength of these forces is, our job as the strategists of the organization is to

We use Michael Porter’s (1980) Five-Force model to analyze the industry. These five forces jointly determine the intensity of competition within the industry and in turn help firms to set their strategies.

An Industry Analysis is used by companies to assess and understand other businesses within the same industry. It is used to gain knowledge overall about the economic, political, and market factors that help develop the way an industry is developed. Business owners are the ones mostly involved in the Industry Analysis because it helps determine a company’s success.

The Porter’s 5 force analysis creates a framework for diagnosing various industrial components that are built around five major competitive forces that decrease long-term industry average profitability. The identified industry structure framework can be applied at the level of the industry, the strategic group (or group of firms with similar strategies) or even the individual firm. The ultimate purpose of the analysis is to create insight on continuity of profits bargaining and against direct and indirect competition.

One of the most important and renowned among the managers for making strategy decisions is the five competitive forces model that determines industries structure.

Using the Porter Five Forces Model an idea of how competitive and attractive an industry is can be deduced. The model focuses

The framework developed by Michael Porter, which identify and analyze the competitive landscape in an industry that impacted by five forces. These forces are the existing competition in the industry, threat of new entrants, the power of suppliers, the power of buyers, and the threat of substitutes. The model helps to determine the profitability of an industry and create a competitive strategy for the business. If the five forces in an industry are strong, this industry will be less attractive because the potential profits will be low, and the reverse also is true.

2. The industry and competitors : analysed by Porters 5 forces framework with critical success factors and strategic groupings

Those factors shape the industry, which includes external and internal factors that influence the industry. In other words, strengths of the industry, weaknesses, opportunities and threats that danger the luxury construction industry. However, if we take Porter’s five forces of competitive framework into consideration and implement it on the luxury construction industry, we’ll manage to observe and understand all forces that help to shape and identify the structure of this industry.

Porter explains that there are five forces that determine industry attractiveness and long-run industry profitability: the degree of rivalry between existing competitors, the threat of entry of new entrants, the threat of substitutes, the bargaining power of buyers, and the bargaining power of suppliers. (Figure 2.1)

This model is also broadly used to analyse the organization structure of a company as well as its business strategy. Porter has identified five indisputable forces that show a part in determining every industry and market around the world. The forces are also commonly used to measure competition concentration. These forces are included threat of new entrants, bargaining