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Porter's Five Forces Model

In: Business and Management

Submitted By wakefield
Words 1220
Pages 5
Assignment 1 (Week 1)
Nelida Wakefield
American Military University

Abstract
Porter’s Five Forces Model is a holistic approach towards competitive strategy. The model provides a framework for the strategic direction of management teams that are seeking an edge over their competitors and additional factors that may undermine profits. The model displays the dynamics between the competitive rivals, buyer’s bargaining power, suppliers, new entrant’s threat and substitutes. The implementation of Porter’s Five Forces Model is crucial on international business practice in order to establish a successful overseas operation and reduce cost of expansion. Global business expansion has become a common practice. Modern organizations are prone to take advantage of international attractive markets that are highly profitable and offer incentives for foreign companies. Implementation of the model increases the chances of success for firms that are considering branching out or simply starting a new company overseas. The Company’s management strategic vision also benefits from Porter’s
Model because it points out the forces that affect the organization’s profitability. However,
Porter’s modeling techniques have some limitations such as the absence of providing meaningful advice for preventive actions and profitability based solely on fighting competitors without taking in consideration opportunities of competitive strategic alliances. In conclusion, Porter’s
Five Forces Model influences the profitability, product prices, costs, and capital investment essential for the survival of an organization that is operating overseas. Porter’s model is fundamental for making strategic decisions and developing successful international strategies that will ensure higher profitable opportunities.

Assignment 1 (Week 1) Porter’s proposed Model is a dynamic holistic

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