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competitive forces that shape strategy

Question 1:
Search the Internet and find the five competitive forces that shape strategy. Briefly explain briefly each force.

Question 2: Determine which of the five competitive forces has the most significant impact on strategy in general. Support your response with evidence or
examples.

Question 3: Select any industry and analyze its underlying structure in terms of the five forces.

Question 4: With the same small business from the first discussion in mind, describe the best possible merger or agreement to grow your company and maximize profits. Explain your rationale.
Question 5: With the same company in mind, discuss the most effective way to sustain and extend a competitive advantage. Provide specific examples to support your response.

Solution Preview

Step 1
The five competitive forces is a framework that asserts that an industry is affected by five forces. The first force is rivalry within the industry. This may be high if there are high exit barriers, industry concentration, and fixed costs. The second force is buyer power. This is the power that buyers exercise over the firm. This depends on the volume the buyer purchases, the bargaining leverage, and buyer information. The third force is supplier power. The extent of this power depends on factors like supplier concentration, presence of substitute inputs, or the threat of forward integration. The fourth forces are threat of new entrants. This depends on barriers to entry, cost advantage, and access to inputs. The fifth force is the threat of substitutes. For example, train travel can substitute for car travel. This force depends on switching costs, and the desire of the buyer to substitute.

Step 2
The force that has the most significant impact on strategy in general is rivalry within the industry. The reason is that firms actively strive to get competitive advantage over others. Even though ...

Solution Summary

This answer offers cogent arguments relating to competitive forces that shape strategy

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