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the danger of monopolies to the economy
the danger of monopolies to the economy
the danger of monopolies to the economy
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The paper below responds to the following three prompts: 1. “The six forces model of strategy helps firms develop externally coherent business strategies”. Discuss applying the model to real cases. 2. Explain strategic posture and how it helps firms make strategy in uncertain business environments. 3. Evaluate the role of mergers and acquisitions in corporate strategy. 1. “The six forces model of strategy helps firms develop externally coherent business strategies”. Discuss applying the model to real cases. The six forces model is an extension to Michael Porter's Five Forces Model. The six forces analyze different areas in an industry. The forces in this model are: a. Competition- Analysis that if there are a lot of competitors. If so, are there any dominant players in the market. b. New entrants- To analyze if it is easy for new entrants to enter the market and compete? c. End users/buyers- Is the price easily affected by the buyers? Can the company work with a specific potential buyer? or to analyze their strength of their position in their relationship with the buyers d. Suppliers- Study the number of suppliers if it is a monopoly and if not, how many suppliers are there in the market. e. Substitutes- To study how easily a product can be substituted and how easily these substitutes are available f. Complementary products- Effect of complementary products and services on the market. The six forces model is used to study the strategic position of a company in a concerned industry and in a given market place. It is also applied to calculate the market effectiveness of a company with regard to competition and profitability. Let us take FedEx as an example. FedEx is one of the largest global courier... ... middle of paper ... ...gy. • Adam Hartung(2014), Three Smart Lessons From Facebook's Purchase Of WhatsApp http://www.forbes.com/sites/adamhartung/2014/02/24/zuckerbergs-3-smart-leadership-lessons-from-facebook-buying-whatsapp/ • Ibrahim AKGÖBEK, Mergers and Acquisitions as a Growth Strategy http://psrcentre.org/images/extraimages/412031.pdf • PALO ALTO, CA and HOUSTON, TX (2001), Hewlett-Packard and Compaq agree to merge, creating $87 billion global technology leader http://www8.hp.com/us/en/hp-news/press-release.html?id=230610#.U00iUvmSy50 • Wikipedia, Tata Group http://en.wikipedia.org/wiki/Tata_Group • Sebastian Spaeth, Nina Geilinger, Corporate Strategy Mergers & Acquisitions http://www.smi.ethz.ch/education/courses/corporatestrategy/Slides_2012/CS_06_MA.pdf • KENT RHODES, Merger and Acquisition Strategies http://gbr.pepperdine.edu/2010/08/merger-and-acquisition-strategies/
As strategy consultants of McCormick & Associates, we use Porters Five Forces Model as a framework when making a qualitative evaluation of a firm's strategic position (Appendix 1.2). These five forces determine the competitive intensity and therefore attractiveness of a market. These forces affect the ability of a company to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the market place.
Every company has internal and external forces that effect how they operate within the community in which they are located and also within their own walls. These internal and external forces play a strong impact on the company’s profitability and success. These forces have an effect on what consumers they attract or ignore and how they are perceived by those who have the buying power. A mistake any analyzing and implementing measures to assist with these factors could greatly affects a company’s bottom line and success. This is why any company wanting to grow and be successful will need to take all of these forces; sociocultural, technological, economic, environmental and political-legal into consideration in creating their strategic plan.
The technique of Porter’s Five Forces Model is discussed in this essay and in applied in the model for shaping strategy of a new and small-size firm in the stockbroker industry. The weakest point in the industry may be local adviser-based brokers and the needed-based positioning may be the suitable strategy for the firm to survive in the fierce competitive market.
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
The Strategy plays an important and vital role in the 7-S’s Model as the strategy is the detailed plan devised to maintain and build the competitive advantage over the competition for achieving and accomplishing the targeted common goals.
Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2008). Crafting & executing strategy: The quest for competitive advantage (16th ed.). New York: McGraw-Hill Irwin.
The Porter five forces model (see Appendix 1) as an external analysis tool was established by Michael E. Porter and firstly announced in his book “Competitive Strategy: Techniques for Analyzing Industries and Competitors” in 1980 . The main idea of the Porter five forces concept is that the attractiveness of a market depends on the characteristic of the five competitive forces that have an impact on a company (see Appendix 2).
Porter's five forces analysis is an industry analysis model developed by Michael E. Porter as a tool for developing business strategies to become or stay competitive in an industry or marketplace as per (Braze, 2013).
Thompson, A.A., Strickland, A.J., & Gamble, J. E. (2010). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases: 2009 custom edition (17th ed.). New York: McGraw-Hill-Irwin
3. Analyze BP using the five forces of competition model to determine the industries current attractiveness in terms of profits potential Danger of Incipient Entrants - The more effortless it is for beginning organizations to enter the business, the more vicious rivalry there will be. Variables that can repress the risk of early contestants are kenned as obstructions to entrance. A few cases include:• Power of Suppliers - This is the amount of weight suppliers can put on a business. In the event that one supplier has a cosmically sufficiently enormous effect to influence an organization 's edges and volumes, then it holds generous puissance.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 25-40.
For assessing the industry profitability, Porter 5 Forces analysis tools were used to analyze one organization evaluation. In this case, the technique were used to analyze 7-Eleven Convenience Store specifically in Malaysia. Porter 5 Forces consists of 5 important area which is Threat of New Entrants, Bargaining Power of customers, Threat of substitute Products and services, Bargaining Power of suppliers, and competitive rivalry within the industry. Theoretically, the more powerful these forces in an industry, the lower its profit potential. The strength of each force differs by industry and changes over time. The competitive advantage that 7-Eleven has using these five forces is it has raised the barrier of entry for other competitors to enter the convenience store market as new competitors will require a huge capital investment in order to implement the information technology in their business in order to be competitive. Also, hypothetically being the first in the market, 7-Eleven could have made contracts with the Malaysia government to not allow other 24-hour convenience stores in the market for a certain time period, such as Astro had done, thus having a monopoly market in the beginning of their operations which will allow them to target a bigger market share.
That reminded me from the case study the director how to plays round of the company to succeed this Colombian Memorial Hospital. External control view of leadership, situations in which external forces where the leader has limited influence determine the organization 's success. Strategy, the ideas, decisions, and actions that enable a firm to succeed. competitive advantage firm 's resources and capabilities that enable it to overcome the competitive forces in its industries. Operational effectiveness, Performing similar activities better than rivals. Intend strategy, strategy in which organizational decisions are determined only by analysis. Realize strategy, strategy in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource limitations, and changes from managerial preferences. Strategy analysis studies of firms ' external and internal environments, and there with organizational vision and goals. Strategy formulation, decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage.