Competitive Forces Analysis
The five forces model utilizes competitive forces within an industry to determine how the industry in which a company competes affects its overall value and could cause future changes in this value. The forces that were included by Porter in this model include the threat of entry, power of suppliers, the power of buyers, the threat of substitutes, and rivalry among existing competitors (Dobbs, 2012; Karagiannopoulos, Georgopoulos, & Nikolopoulos, 2005). I will discuss each of these in the analysis below through the context of the international express delivery or package courier market. The risk that new competitors will enter a market, called the threat of entry, is measured by five separate elements itself and can lead to significant reductions in value for a firm. These elements include economies of scale, network effects, …show more content…
It can be defined by three distinct elements: competitive industry structure, industry growth, and exit barriers (Yunna & Yisheng, 2014). Competitive industry structure is a determined of where an industry falls on the competition spectrum from perfect competition to monopoly. This industry falls somewhere between perfect and monopolistic competition because there a significant number of firms providing good and services, some competitors hold medium levels of pricing power, the products and services are only able to be differentiated on a minimal level, and the entry barriers to the industry are of medium difficulty to overcome. The industry is growing at either average levels or below average levels depending on whether we are evaluating the domestic or international market. The exit barriers to leaving the industry are quiete low as can be seen from the fact that some manufacturers have left the industries in which Apple competes in the last few years (Cardin, 2016; Martin C. , 2014; Hearn, 2014; Yarow,
The five forces model utilizes competitive forces within an industry to determine how the industry in which a company competes affects its overall value and could cause future changes in this value. The forces that were included by Porter in this model include the threat of entry, power of suppliers, the power of buyers, the threat of substitutes, and rivalry among existing competitors (Dobbs, 2012; Karagiannopoulos, Georgopoulos, & Nikolopoulos, 2005). I will discuss each of these in the analysis below through the context of the international express delivery or package courier market. The risk that new competitors will enter a market, called the threat of entry, is measured by five separate elements itself and can lead to significant reductions in value for a firm. These elements include economies of scale, network effects, …show more content…
It can be defined by three distinct elements: competitive industry structure, industry growth, and exit barriers (Yunna & Yisheng, 2014). Competitive industry structure is a determined of where an industry falls on the competition spectrum from perfect competition to monopoly. This industry falls somewhere between perfect and monopolistic competition because there a significant number of firms providing good and services, some competitors hold medium levels of pricing power, the products and services are only able to be differentiated on a minimal level, and the entry barriers to the industry are of medium difficulty to overcome. The industry is growing at either average levels or below average levels depending on whether we are evaluating the domestic or international market. The exit barriers to leaving the industry are quiete low as can be seen from the fact that some manufacturers have left the industries in which Apple competes in the last few years (Cardin, 2016; Martin C. , 2014; Hearn, 2014; Yarow,