Business Strategy: Competitive Forces and Value Chain Analyses
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1. How strong are the competitive forces within the industry your organization competes in (Or an industry of your choosing)? What does Five Force Analysis tell us about the industry? Comment on Driving Forces, and Key Success Factors.
2. What does a Value Chain Analysis tell you about the core competencies and competitive advantage of the company, that key functional activity that adds value to the customer's experience. [Your current employer, or a company from the case readings in the text].
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This solution discusses competitive forces within industries and value chain analyses.
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Business Strategy
1. How strong are the competitive forces within the industry your organization competes in (Or an industry of your choosing)? What does Five Force Analysis tell us about the industry? Comment on Driving Forces, and Key Success Factors.
As per quick mba, Michael Porter provided a framework that models an industry as being influenced by five forces. These five forces are:
- Supplier's power
- Customer's power
- Degree of rivalry
- Barriers of Entry
- Threat of substitutes
The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. The five forces are environmental forces that put an impact on a company's ability to compete in a given market.
The purpose of studying five forces is to find the environmental forces that put an impact on a company's ability to compete in a given market. The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.
I have taken the example of HP:
Let us discuss each of the factors:
Degree of rivalry
There is a competition in this industry primarily on the basis of technology, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, availability of application software, and Internet infrastructure offerings. (HP annual report, 2009) But on the positive side there ...
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