APP5LewisA - 1 Analyzing Management Strategies: The Five...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Analyzing Management Strategies: The Five Forces Model Analyzing Management Strategies: The Five Forces Model Alan R. Lewis MMBA6501-5 Walden University 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Analyzing Management Strategies: The Five Forces Model The Five Forces model is a tool used for analyzing the potential profitability of industries and developing business strategy formed by Michael E. Porter of Harvard Business School in 1979 (Porter 1995). The five forces outlined in Porter’s model are the following: External: 1. The degree of competitive rivalry, 2. The availability of substitute products or services, 3. The ease of entry of new competitors, Internal: 1. The bargaining power of buyers 2. The bargaining power of suppliers In reality thought the five force model is probably better described as 4 forces that act to either intensify or decrease the competitive rivalry. My reasons for choosing this theory are twofold: first, this theory has direct bearing on what I currently do for a living. Specifically, I work in an industry where the product can sometimes be easily commoditized and this model can help to avoid some of the pitfalls related to perfect competition. Secondly, I am also in a very cyclical industry and this model can help to better predict and therefore plan for those cycles and as result maintain a better overall business strategy. The application of the five forces model is almost intuitive. There are four forces that affect the competitive and the intensity of that rivalry typically directly related to the profitability of the product. So it follows that if you tweak any of the four levers that your overall profitability 2
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/14/2012 for the course MBA MMBA6501-5 taught by Professor Bush during the Spring '11 term at Walden University.

Page1 / 6

APP5LewisA - 1 Analyzing Management Strategies: The Five...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online