Five Forces - trends and look and underlying fundamentals...

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Click to edit Master subtitle style 5/18/11 Michael E. Porter’s FIVE COMPETITIVE FORCES Focus: Competition has been viewed too narrowly. Competition is actually a dynamic interaction of five industry forces.
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5/18/11 Every Industry Can Apply the Theory of the Five Example: Airline Industry Rivalry is extremely intense and is based exclusively on price Constant stream of new entries Customers are fickle and totally price driven Powerful labor costs Virgin America is the first to break out of
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5/18/11 Different Industries Have Different Underlying The Five Forces can be benign, as in the case of Soft Drinks New entrants, substitute products, customers, suppliers and rivals are present, however, they do negatively impact the profitability of the industry. Everyone gets a share in this golden industry.
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5/18/11 Five Forces Gives a Comprehensive Perspective Using this model businesses can
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Unformatted text preview: trends and look and underlying fundamentals that enable or limit profitability • Example 1: During the internet bubble people forgot to comprehensively study industry profitability and followed a trend that 5/18/11 How to use the Five Forces • Most companies would be best served by growing the whole industry pie rather than engaging in destructive battles with rivals. To best use this theory companies should follow these steps: • 1. Start with industry analysis. 5/18/11 Discussion • Do you think that Facebook considered the Five Forces when the began or when they became the leader of the online social networks? • Twitter began by offering people an opportunity to briefly post about what they are doing and where. Now many companies offer the same service. How does Twitter remain so...
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