According to Porter, what determines the level of competitive intensity in an industry?
According to Porter's discussion of 'industry analysis,' is Pepsi-Cola a substitute for Coca-Cola?
How does competitive intensity change in a 'fragmented industry' VERSUS A 'consolidated industry'?
Discuss how a development in a corporation's societal environment can affect the corporation though its task environment.
Brief preview on 5 Forces Analysis
Today's business environment is extremely competitive; hence organizations strive to create a competitive advantage to thrive in the competitive scenario. Michael Porter, considered to be one of the foremost gurus' of management, developed the famous five-force model, which influences an industry.
1. Industry competition/Degree of rivalry
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Government regulations
5. Threat of New entry
This model gives a fair idea about the industry in which a company operates and the various external forces that influence it. It's dynamic and over a period of time the model, which have used to analyze the industry may itself evolve.
Q Michael Porter's Industry Analysis, According to Porter what determines the level of competitive intensity in an industry?
One of the measures of the rivalry is concentration ratio, the higher CR ratio indicates less competition and vice versa. There are several factors which affects competition intensity in an industry:
1. Number of competitors
A larger number of firms increases rivalry increases the competition. For example in the Automobile market the competition is intensifying between GM, Ford, Toyota, Chrysler etc.
2. Rate of industry growth
The slow growth increases the competition in the industry.
3. High fixed costs
It leads to increase in competition as firms ...
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