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corporate strategy, Porter's model can be applied to any segmentof the economy to search for profitability and attractiveness. The five forces identified are:1. Threats new entrants -This force determines how easy (or not) it is to enter a particular industry. If an industry is profitable and there are few barriers to enter, rivalry soon intensifies -High when many alternative are available and low when alternatives are few2. Power of suppliers; - Strong bargaining power allows suppliers to sell higher priced or low quality raw materials to their buyers - High when buyers have few choices and low when choicesare many3. Power of customers; - This force looks at the power of the consumer to affect pricing and quality - High when buyers have many choices and low when choices are few4. Threat of substitute products. - This force studies how easy it is for consumers to switch from a business's product or service to that of a competitor.- High when many alternative are available and low when alternatives are few5, Competitive rivalry - The importance of this force is the number of competitors and their ability to threaten a company - High when many alternative are available and low when alternatives are fewPorter’s Five Force DiagramTHREAT OFNEW ENTRANTSBarriers to EntryAbsolute costadvantages Proprietary learningcurve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary productsRivalryTHREAT OFSUBSTITUTES-Switching costs -Buyer inclination tosubstitute -Price-performancetrade-off of substitutesSUPPLIER POWERSupplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost ordifferentiation Switching costs of firms in the industryPresence of substitute inputs DEGREE OF RIVALRY-Exit barriers -Industry concentration -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes
.Porter's 5 Forces Definition | Investopedia.Ch. 2, Major Business Initiatives Gaining Competitive Advantage with IT3. Supply Chain Management (SCM)This chapter states a supply chain management (SCM) systemis an IT system that supports supply chain management activities by automating the tracking of inventory and information among business processes and across companiesSCM attempts to centrally control or link the production, shipment and distribution of a product. By managing the supply chain, companies are able to cut excess costs and deliver products to theconsumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales and theinventoriesof company vendors. SCM is based on the idea