Porter's Five Forces

Paper Summary:

The purpose of this paper is to look into Porter's Five Forces and determine a need to apply the study in the corporate world. It also makes an effort to compare and contrast two different industries which have totally different environment and hence are driven by different drivers. It shows how the Porter's Five Forces tool is a very simple but powerful and effective tool for understanding where power lies in a business situation and how it helps one understand both the strength of their current competitive position and the strength of a position they are looking to move into. The model assumes that there are five different forces that predominantly determine power in a given situation.

Outline
Introduction
Analyzing the Model to Determine Entry into a New Industry

From the Paper:

"The second industry we can take up for this analysis is FMCG. there are threats and driving factors to its support like in case of any other industry. A new firm thinking of setting up a business and thinking of making a name in the market will have to first of all be able to compete with the existing firms, as they can be renowned in the market. So the key factor here is that of reputation and goodwill. To perform Porter's analysis, we will have to look at all the factors once again. To start with the threat of new entrants, there can be a threat from the new entrants, who have the potential to offer cheaper products with better quality. The new company can go for a kill by going for a low priced penetrating strategy, until it gets a better part of the market share. The existing companies will have to follow suit and have to bring their prices down to compete with the new entrant."

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