Analysis Of Porter's Five Forces
The need for all managers is to be able to think strategically. Decisions by managers have a strategic impact and contribute to strategic change. Strategic management is a highly important element of organisational success. Strategic success requires a clear understanding of the needs of the market, and the satisfaction of targeted customers more effectively and more profitably than by competitors. Unlike the models that have been discussed in the essay, managers now have to take consideration of not only just the market as Porter suggests but the companies resources and competences of gain complete competitive advantage. With the emergence of newer, faster technological innovations it is vital that businesses within the gadget market are able to compete successfully with their competitors or face losing a foot hold within their industry. An example of this would be in the mobile phone market. This market can be described as a hyper-competitive market due to rapid changes within the market and the high intensity of …show more content…
Exploring Corporate Strategy: Text and Cases. 9th ed. England: Financial Times Prentice Hall. Pg 4.
Hamel and Prahalad believed that competitive advantage derived from deeply rooted abilities which lie behind the products that a firm produces.
Some of these barriers to entry include economies of scale, brand identity, capital requirements and government policy
Henry Mintzberg, Bruce Ahlstrand & Joseph B. Lampel (2008). Strategy Safari: The Complete Guide Through the Wilds of Strategic Management. Canada: FT Prentice Hall. Pg 105.
Prahalad and Hamel went on to outline three tests to be applied to determine whether something is a core competence:
• First, a core competence provides potential access to a wide variety of markets.
• Second, a core competence makes a significant contribution to the perceived customer benefits of the end product.
• Third, a core competence is difficult for competitors to imitate because it is a complex harmonisation of individual technologies and production skills. (The Economist, 2008)
The Economist. (2008). Idea: Core Competence. Available: http://www.economist.com/node/12231124. Last accessed 3rd December