Porter Five Forces in the Robotics Industry Essay

1715 Words Mar 24th, 2014 7 Pages
Porter’s Five Forces in the Robotics Industry
Iryna Varniaga
University of Maryland University College
Fall 2013

Turnitin score: 25%

Porter’s Five Forces in the Robotics Industry “Porter’s five forces”: Introduction. “Porter’s five forces” is widely applied in today’s business world. Harvard Professor Michael E. Porter’s first HBR article “How competitive forces shape strategy” was published in 1979. It became revolutionary in the field of strategy. Porter’s subsequent work has brought big changes to the study of competitive strategy for corporations, regions, and nations. With assistance from his colleagues from Harvard Business School, Porter continues to update and extend his classic work, providing practical guidance for
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Also, the potential for product differentiation is high. Size, power, features, service, quality of the products, and other factors are different. The competitive rivalry is reduced by potential for differentiation. On the other hand, it is increased by a slow rate of growth, because firms tend to compete more against their rivals and try to steal market share. The industry requires large and specialized investments, which leads to the high fixed costs and high exit barriers. There is a stronger competition among the similar in size, market share, and resources rivals. The level of balance in the industry is relatively low. Rivals as a rule have different backgrounds and views toward the industry. A lot of them are committed to the industry. Considering all the above factors, the level of competitive intensity among rivals is moderate (Hopkins, 2008). The Power of Buyers. Customers can capture more value by forcing down prices and demanding better quality at the expense of industry profitability. Most sources of buyer power can be applied equally to consumers and to business-to-business customers (Porter, 2008). The number one buyer of the robotics industry is the automobile industry. The number of auto firms is small, but they are big, buy in great volume, and represent a large percentage of total sales. Using their buyer’s power, they can backward integrate or substitute robots with manual labor. On

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