The Analysis of Nike in Athletic Footwear Market Based on Porter’s Five Forces Model

3147 Words May 10th, 2011 13 Pages
The analysis of Nike in athletic footwear market based on porter’s Five forces model by Duke

Given the demands of today's competitive and dynamic environment, it is quite challenging to understand strategic issues facing organizations and develop the capability for long term organizational success. Introduction in today's dynamic and competitive business environment, survival, growth and profitability are the essence goals of all industries. Nowadays, Porter's Five Forces is currently being adopted as the powerful management tool of choice by many organizations. The essence of Porter's Five Forces is that it can help senior managers to make right decision and build and sustain competitive advantages in the organization
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That's why the framework becomes the useful analysis tool to analyze a company is able, or unable, to make a decent profit. The collective strength of the five forces determines the ultimate profit potential of an industry (Pearce and Robinson, P.92) It arrange from intense in industry like steel metal cans, where no company gain considerable returns on investment, to mild in industries like oil-field services and equipment, soft drinks, and toiletries, where large spacious room exists for quite high return.

What's more, this model also overemphasizes the importance of industry structure as a determinant of company performance and underemphasizes the importance of differences between companies within an industry (Hill and Jones, 1995). The model focuses on an industry as a whole not on individual firms. Actually there can be vast variance in the profit rate of individual companies within an industry. Recent research shows that industry structure explain only about 10 percent of the variance in profit rates across companies, suggest that individual resources and capabilities of a company are far more important determinants of its profitability than is the industry. A company will not be profitable just because it is based in an attractive industry. (Hill and Jones, 1995) 2.3Implementation issues within organizations some issues during the implementation

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