...A WATER UTILITY CONCESSIONER PORTERS FIVE FORCES ANALYSIS 1. Rivalry among existing competitors- Low to Non-Existent. Since it is under concession agreement, there is no other water utility company that can engage any business similar to A Water Utility concessioner, unless granted by the government under special agreement and with full knowledge and approval of A Water Utility concessioner. 2. Threat of new entrants- Low to Non-Existent. Companies that may want to apply for the concession must first comply with government requirements and also must have a substantial amount of capital investment (around 6 Billion Dollars starting capital), not to mention the technical expertise to run and maintain a water utility company. 3. Bargaining Power of Supplier- Medium. Although the primary raw material of A Water Utility concessioner is water which is basically free, the materials used for distribution line maintenance and expansion are quite few. Though this is the case, A Water Utility concessioner still has a slight control on the pricing of these materials unless the raw materials for these items like resin, steel, alum coagulating chemical used in treating raw water), etc. increases. 4. Bargaining Power of Customer- Medium. This is due to the regulated tariff by the government under the MWSS Regulatory office which deals directly with A Water Utility concessioner.\ 5. Threat of Substitute- Low. The small water refilling stations also get their...
Words: 353 - Pages: 2
...Apple Inc. specialises in development, design and marketing of computers, portable-digital music players and other didgital devices including iPad’s and mobile devices (IPhone). Apple Inc. are also involved in selling multiple supporting software, digital content, third party applications, networking software and services. Apple Inc. predominantly operate from their U.S headquarters in Cupertino, California and involves 72,800 employees (Forbes, 2013). Revenue for APPL in 2013 has risen from $155.97bn in 2012 to $170.87bn in 2013 (Market watch, 2013) which is a 9.6% increase. The objective of the Porter’s 5 forces model is to identify and elucidate the current levels of competition existing with a market, by examining what the 5 forces involve. ‘The model therefore provides a detailed and nuanced picture of the industry and to make an in-depth analysis with an idea of what factors one can try to influence in order to create optimal conditions for one’s business and the industry” (P.K. Faarup, P113, 2010). Threat of new entrants High levels of competition currently being practiced in the PC and mobile industry make it difficult for potential competitors to enter the market. Unlike many companies Apple inc. has secured brand loyalty from customers by focusing on product innovation and, research and development. Another way apple has secured its brand loyalty is by creating an emotional connection with consumers by embracing the internet and social media to voice what the...
Words: 1770 - Pages: 8
...The FICCI-KPMG Indian Media and Entertainment Industry Report 2013 published a record 16% growth over the previous The report also states that the games industry in India will grow at a 22% CAGR to cross Rs. 4000 crore ($776m) by 2017. That means the video games industry in India will almost triple itself in 5 years.year, to Rs.1500 crore (Rs. 15 billion / $277 million). Sweet numbers. The console segment will overall grow at a rate of 19% CAGR, to reach Rs. 1900 crore ($351m) by 2017. The report is yet to take in other future factors such as the possible success/failure of PS4 and the upcoming Xbox. On the other hand, the Internet & Mobile Association of India estimates that 50% of India’s mobile users have access to gaming content on their devices. These numbers are expected to rise amid increased penetration of smartphones and tablets. Mobile gaming revenues in India typically have come through telecom operator partnerships, but this is expected to change by 2014, the report states, when sources such as app-stores and online marketplaces will dominate mobile revenues. This despite the fact that operators are now offering up to 70% revenue share to game publishers. As expected, the big challenge for game publishers is monetisation, as a chunk of mobile game revenue in India comes from ad-funded free-to-play games. This also might be due to the fact of limited high-speed connectivity of smartphones and tablets alike, and limited access to credit cards. On a positive...
Words: 654 - Pages: 3
...THE FIVE FORCES INDUSTRY COMPETITORS. Rivalries naturally develop between companies competing in the same market. Competitors use means such as advertising, introducing new products, more attractive customer service and warranties, and price competition to enhance their standing and market share in a specific industry. To Porter, the intensity of this rivalry is the result of factors like equally balanced companies, slow growth within an industry, high fixed costs, lack of product differentiation, overcapacity and price-cutting, diverse competitors, high-stakes investment, and the high risk of industry exit. There are also market entry barriers. PRESSURE FROM SUBSTITUTE PRODUCTS. Substitute products are the natural result of industry competition, but they place a limit on profitability within the industry. A substitute product involves the search for a product that can do the same function as the product the industry already produces. Porter uses the example of security brokers, who increasingly face substitutes in the form of real estate, money-market funds, and insurance. Substitute products take on added importance as their availability increases. BARGAINING POWER OF SUPPLIERS. Suppliers have a great deal of influence over an industry as they affect price increases and product quality. A supplier group exerts even more power over an industry if it is dominated by a few companies, there are no substitute products, the industry is not an important consumer for the suppliers...
Words: 1142 - Pages: 5
...Application of Porter’s Five Forces Model on Tata NANO Brand Name: Unit Name Unit Code Tutor School Date Introduction The turnover in automotive industry is growing significantly. Companies need to sell their product across borders. To realize this, companies must evaluate the market forces in target markets in order to increase sales. One strategic tool used in evaluating market forces is porters five forces model. This tool highlights the key factors that determine the industry competition and the viability of such a market. The porters five forces model has been evolving with time. The principle ‘’the state of competition in an industry depends on five basic forces’’ (Porter, 2008 P.3) is still relevant. This analysis model covers a wide range of factors affecting the industry. Companies with awareness about their environment are able to make strategic decisions concerning their business. This paper discuses the application of Michael porter’s five forces model by Tata Motors Company on their new product, Tata Nano. Tata motors are the largest automobile company in India with revenues in excess of USD 16 billion in 2011. Tata motors have subsidiary companies and associate companies involved in various industries including mining, oil, manufacturing, and telecommunications. Tata motors have operations in Spain, Korea, Thailand, UK, and South Korea. The paper begins by identifying porters five forces. Second, a brief history of...
Words: 3047 - Pages: 13
...UMUC Haircuts Stage One Wesley Mantlo University Maryland University College Information Systems in Organizations (IFSM 300) UMUC Haircuts Stage One This report is based on gaining intellectual technology knowledge from a business standpoint. The Porters 5 Forces Analysis will be used as the beginning stage into this continuing project. UMUC Haircuts will be used as the background story to gain real world experience through creating solutions around Porters 5 Forces Analysis. This report is written in stages with gradual information given as is required. Stage II, minimally explains the forces, how they are relevant to the UMUC Haircuts, Impact and whether or not it will impact the strategy. Porters Five Forces are: Buyer Power, Supplier Power, Threat of Substitute Products or Services, Threat of New Entrants, and Rivalry among Existing Competitors. Buyer Power is the force that the buyer has on a product. UMUC Haircuts will want to bring in the most amounts of customers to gain the financial footstep in the Haircut industry. This is a positive impact and can affect the strategy. Supplier Power is big in the Haircut industry, especially as it pertains to personal hygiene. This is a positive impact and will affect the strategy. The threat of Substitutes in this industry is high with a neutral impact and does not affect the strategy. Generally, people who cut other peoples hair are personal friends or a fad and there is always months of opportunities where...
Words: 902 - Pages: 4
...the proposal. I thank Him for the great mind He has given to me no forgetting the good health and capability to attend the University. Also, I am thankful to my supervisor who took me through the proposal step by step and correcting me until I successfully finished it. He was patient with me throughout the whole experience. I am thankful for the knowledge he impacted in me and guiding me well. TABLE OF CONTENTS DECLARATION i DEDICATION ii ACKNOWLEDGMENT iii ABSTRACT vi INTRODUCTION 1 1.1 Background to the study 1 1.2 Michael Porters’ five forces model 2 1.3 Top 100 SMEs in Kenya 2 1.4 Profile of the selected SMES 3 1.5 Problem statement 5 1.6 Research objectives 5 General objective 5 Specific objectives 5 1.7 Research questions 5 1.8 Scope of the study 6 1.9 Significance of the study 6 CHAPTER TWO 7 LITERATURE REVIEW 7 2.1 Introduction 7 2.2 Overview of the five forces 7 2.3 Michael Porter’s five forces model 8 2.4...
Words: 10760 - Pages: 44
...face declining productivity and stagnant margins from 1999 to 2003, which drove the debt to increase, however in 2004 ECCO showed signs of improvements in its financial capabilities and, is looking to strengthen its integrated value chain from ‘cow to shoe’, by making it more efficient and cost effective. ECCO realized that it needs to focus on long term sustainability and also they understood the importance of moving towards a marketing oriented path, which would help ECCO leverage on its innovation, research capabilities and tis high quality products. Porters five forces Every industry’s attractiveness can be gauged from the competitive forces in the industry. To assess the industry attractiveness and long term sustainability we can use Porters Five Forces to analyze their competiveness using 5 factors, rivalry, entry barrier, threat of substitute, supplier power and buyer powers. Situational Analysis – Porter five forces Every industry’s attractiveness can be gauged...
Words: 895 - Pages: 4
...describe the three important organizational resources within it – people, information, and information technology. 2. Describe how to use break-even analysis to assess the financial impact of information technology. 3. Describe how to use Porter’s Five Forces Model to evaluate the relative attractiveness of and competitive pressures in an industry. 4. Compare and contrast Porter’s three generic strategies and the run-grow-transform framework as approaches to the development of business strategy. CHAPTER SUMMARY This chapter serves two primary purposes. First the chapter introduces your students to the broad notion of management information systems within an organization and the three key resources on which MIS focuses – people, information, and information technology. Second, the chapter jumps right into the process of appropriately selecting which technologies to use based on the industry in which your organization operates, the identified business strategies for competing in that industry, and how to assess the impact of technology. The primary sections of this chapter include: 1. MIS Resource #1: Information 2. MIS Resource #2: People 3. MIS Resource #3: Information Technology 4. Financial Impact of IT: Break-Even Analysis 5. Industry Impact of IT: Porter’s Five Forces Model 6. Strategy Impact of IT: Porter (Again)...
Words: 3890 - Pages: 16
...2014 Kerry Taylor 30137553 12/2/2014 2014 Kerry Taylor 30137553 12/2/2014 Marketing Management and Strategy Marketing Management and Strategy Contents Introduction 2 Aldi 3 Buyer's bargaining power: 4 Suppliers' bargaining power: 4 Threats of substitutes: 4 Threats of new entrants: 5 Recommendations 6 Bibliography 7 Introduction Retailers differentiate themselves from one and other, this terminates the consumer's perception of competing stores. This is promoted through the strategic development, the marketing‐oriented application of technology, and precise targeting of consumer demands. The author's Strategic Choice Grid indicates that, through insightful and innovative marketing, UK grocery retailers can avoid the stagnation threatened by saturation. Aldi Aldi started in 1946, when the Albrecht brothers took over their mother’s grocery store in Germany. According to (Ruddick, 2014) from the small provincial store, they built one of Germany’s biggest retailers, which is renowned for its low prices. Aldi arrived in the UK in 1990 and has opened over 500 stores and has over 9000 stores in 18 countries. Aldi’s product range specialises in their own brand, which are cheaper than well-known brand labels. This is because they can control their prices at its distribution level. Aldi does not only stock food products, they also stock items such as; underwear, toiletries and fishing equipment. Comparing Aldi to the four major...
Words: 2061 - Pages: 9
...publisher. Requests for permission should be directed to permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. ISBN: 978-1-4221-6059-6 By his example, Arthur Rosin, my uncle, taught me the pleasures of understanding and explaining. This book is dedicated to him, to Betty Rosin, and to my parents, Cyrille and Eugene Gorin. Contents Copyright Acknowledgments Introduction Part One: What Is Competition? 1. Competition: The Right Mind-Set 2. The Five Forces: Competing for Profits 3. Competitive Advantage: The Value Chain and Your P&L Part Two: What Is Strategy? 4. Creating Value: The Core 5. Trade-offs: The Linchpin 6. Fit: The Amplifier 7. Continuity: The Enabler Epilogue: A Short List of Implications FAQs: An Interview with Michael Porter A Porter Glossary: Key Concepts Chapter Notes and Sources About the Author Acknowledgments The Michael Porter I know is first and foremost a gifted teacher. If this book succeeds in helping readers understand Porter’s ideas in their full richness, it is thanks in large measure to his encouragement, his guidance, and his patience in explaining those ideas to me. As this book progressed, he carefully reviewed every chapter, giving generously both his time and his laser-sharp attention. The company examples I have used to illustrate Porter’s ideas draw not only on his work, but also on that of many researchers and business writers. Where I have used...
Words: 59071 - Pages: 237
...Article review - the 5 forces that shape strategy The article “The five forces that shape strategy” is written by Michael E. Porter. The article focuses on the “awareness of the five forces” (Porter, 78), the writer believes that it “can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack” (Porter, 78). His objective is to provide the readers with a more in depth perspective of the framework of the “five forces”. In this article, Porter emphasizes on the framework of five forces namely: rivalry among existing competitors, threat of new entrants, threat of substitute products or services, bargaining power of buyers, and bargaining power of suppliers. We can refer the first there are as external sources, and the other two as internal sources. We can also think of the external and internal sources as micro and macro environments. The framework of the five forces collects massive different factors and put them into one simple model. Porter uses this framework as his base when analyzing an industry’s basic competitive situation. I think that Porter tries to tell the readers that of one wants to propose a feasible strategy, one should first confirm and analyze these five forces. Porter also addressed that each profession or each enterprise more or less must has to deal with the threat which the above each forces constitutes. According to the article “a company strategist who understands...
Words: 475 - Pages: 2
...ijcrb.webs.com SEPTEMBER 2011 VOL 3, NO 5 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Porter Five Forces Analysis of Pakistan Mobiles Communication Limited (Mobilink): A Critical Approach Akhtar Munir Retail Sales Officer in Mobilink. Afnan Khan Saddozai Management Trainee Officer in National Bank of Pakistan Dr.Bakhtiar khattak Chairman: Department of Business Administration, Gomal University, D,I.Khan Dr.Shumaila Hashim Lecturer: Dept of Bus.Administration, Gomal University, D.I.Khan. This paper has written as a part of academic research, on the basis of data availability. The analysis is based on researchers’ own understanding; company’s management may disagree with it. Abstract This paper attempts to analyze the intensity of competition within industry for Mobilink on the basis of Porter five forces model. Study indicates that although it is a market leader in cellular sector in Pakistan yet it has strong rivals. Further more subscribers’ switching cost is low. So the company is required to must consider these two factors in policy formulation. On the other hand position of forces like suppliers and substitutes availability and potential entry of new entrants is weak. Key Words: Mobilink, Pakistan, Porter Analysis, Subscribers, Suppliers, Rivals JEL Classification: F23, L25, L63, L96, N7 Introduction Environmental scanning is the most important step in strategic management process, which is conducted to find out all those trends and events that...
Words: 3652 - Pages: 15
...In international business theory there are a number of useful models for the external environment analysis of specific countries. These methods can be applied by companies that aim to internationalise and so to define the right location(s) abroad in terms of institutional as well as cultural fit and success opportunities. Correspondingly, concepts like this also provide insightful information for explaining the location choices which organisations have already made. One such framework is the so called Diamond Model introduced by Michael Porter in 1990. This essay tries to determine its advantages and disadvantages as a tool for the examination of firm‟s home and host location decisions by focusing on two major MNEs: the world‟s second-largest high-street retailer –French Carrefour and UK‟s famous Marks & Spencer Porter s Diamond Model(1990: 73) argues that “nation‟s competitiveness depends on the capacity of its industry to innovate and upgrade” and therefore is determined by a nation‟s level of productivity. From an organisational perspective this means that national competitive advantage depends on the nations ability to provide a home base for companies to sustainably improve their products and services in terms of quality, features, technology and so to successfully compete in highly productive industries internationally. Hence, the advantage of the framework is that it identifies four important, interrelated factors that create and illustrate the essential national environment...
Words: 2952 - Pages: 12
...Knowledge Resource Centre KNOWLEDGE FINDER BACK TO KNOWLEDGE HOMEPAGE ------------------------------------------------- Top of Form Bottom of Form KNOWLEDGE FINDER BACK TO KNOWLEDGE HOMEPAGE PRINT VERSION SEND TO A FRIEND Management Tools Porter's Five Forces and Profitability M.E. Porter, "How Competitive Forces Shape Strategy", Harvard Business Review, 1980. This diagram has been recreated by LMC. LMC explains Porter's Five Forces and Profitability A business strategy tool designed to analyse a strategic business unit and its relationship with and competition within the industry. Using five key areas affecting profitability, the results give a company insight into its industry attractiveness. The five forces are identified as: bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threats from substitute products and competitive rivalry. Each force is analysed in terms of whether it will produce higher or lower profitability if its effects are felt. 1. Bargaining power of suppliers This will be high or strong where there are relatively few individuals holding the power, where the costs of changing suppliers are high, or if the supplier has a strong brand. 2. Bargaining power of buyers This will be strong where market share is controlled by few buyers, for example large supermarket chains in the groceries market, or if the costs of switching supplier are low. 3. Threat of new entrants There can be various barriers...
Words: 2714 - Pages: 11
