Porter's Five Forces Essay

In my opinion, I think that the Porter five forces model is still relevant in today’s competitive environment. It is because porter’s five forces can give the managers in the corporate to analyse the current situation of their industry in a structured and understand easily way (Porter 2001). Based on the strategic management view, it is good for managers of any organization in the similar industry or sectors to understand the five competitive forces acting and between organizations in the similar industry or sector. Secondly, this model can used to compare the impact of competitive forces on their own organization with the impact on their competitors. Competitors may have the different options to react towards

Many firms and their competitors are taken into account by using this framework and therefore the analysis that conducted by them by using this framework was getting a good deal of the information on the activities that take place in the market (Johnson et al 2009). As a result, the analysis can provides an idea about the attractiveness of that industry and the way in which the individual organizations would choose for compete (Johnson et al 2009) as well as profitability of the business which like analyses a company is whether can or can’t make a decent profit and also identify the ultimate profit potential of an industry (Porter 2001) and also helps the firms to decide either to enter or exit from a particular industry (Johnson et al 2009) and also the firms whether can be positioning and its abilities to provide the best defence against the existing array of competitive forces (porter five forces

It means that how the bargaining power of suppliers, bargaining power of buyers, threat of new entrants and threat of substitutes would influence the different competitor’s compete in that particular similar industry and according to different size industry. All the firms among the industry are different and they affected differently (Johnson et al 2009). Some of the firms are large size and capital while some of the firms are small or medium and therefore their industry structures are not the same (Johnson et al 2009). For instance, in banking industry, there are retail banks, corporate banks and western unions. The affect could uncover by conducting the industrial analysis and therefore the firms could have the strategies to continue exist in the market (Johnson et al