Porter's Five Forces Essay

884 Words Dec 9th, 2012 4 Pages
Porter’s Five Forces 1
In talking strategy for any company, Porter’s Five Forces Model is likely to come up. It has served as a strategic planning guideline for years. If a company is just starting out, they would have to analyze the model and apply it to themselves from every aspect. If a company is well established, the model can serve as points that need to constantly be revisited. In going global, the tool becomes invaluable. It still only serves as a guideline, but it delivers significant points that have to be examined in a different culture of diverse laws and governmental controls. The following paragraphs will describe Porter’s Five Forces Model, describe how it can assist in going global, and examine possible limitations
…show more content…
Finally, threat of new entrants/entry barriers describe the new companies wanting to enter the market and the challenges that new firms face . An example where new entry threat is low is for household products. It is true that a small manufacturer could come up with a good detergent, but competing with Proctor and Gamble, Colgate-Palmolive and Kimberly –Clark would be a huge deterrant for them. (Quick MBA 2010).
When developing the international strategy for an organization, the Five Forces Model can be an invaluable tool. Especially when companies are dealing with different history, culture, and governmental policies, managers can focus more on certain aspects of the model. For example, the rise of the Protestant ethic in England has had a lasting effect on consumer patterns. Consumers there are more willing to shift their loyalty, thereby creating strong buyer power. A company looking to expand would want to focus on that aspect of the model when formulating their business plan. Another example is the role of the financial minister in Japan. He would interchange five year periods of deflation and inflation to weed out weak companies. Even though this policy is no longer in effect, the rivalry among companies operating in Japan is very strong. Obviously, a manager would want to focus on that aspect of the model. A final example is the South Korean family owned businesses that have turned into

Related Documents