UNIT 7 porters 5 forces model

Question 1

what does porters 5 forces provide

Answer 1

simple framework for assessing and analysing competitive strength and position of an organisation

Question 2

porters 5 forces can be used for good analytical effect with what other models

Answer 2

pest-c
SWOT

Question 3

Porters 5 forces model provides suggested points under each heaidng which managers cna use develop

Answer 3

a broad analysis of comp position which might be used when creating strat plans or making I descisons about bs

Question 4

what are the five forces

Answer 4

power of buyers
power of suppliers
threat of new entrants
competitve rivalry
threat of substitutes

Question 5

if firm faced same comp pressures in all mkts then how would profitability e.g ROCE be

Answer 5

very similar

Question 6

what can be explained to some extent through the analysis of diff competitive environments

Answer 6

why some industries have hig profits but others have low profits

Question 7

state the 5 characteristics of high profit industries

Answer 7

mild comp between bs

suppliers w little power
customers having little power

little threat of sub products being developed
no rela prospect of new entrant to industry

Question 8

state 5 likely characteristics of low profit industries

maybe low prof cuz so many so take up tiny parts of mkt share between them

Answer 8

intense rivalry between bs

very powerful suppliers
customers with considerable power

imminnent threat of develop of sub g/s
highly likelihood of new entrants to mkt

Question 9

when was it developed

Answer 9

1980s

Question 10

what does ocmpetitive envio refer to

Answer 10

mareket structure and teh dynamic system in whihc a business competes

Question 11

what are teh 5 forces

Answer 11

THREAT of new enyrats

bargaining power of buyers

threat of subsitute products or services

bargaining power of suppliers

rivalry among existing compeitiros

Question 12

entry threat relates to

Answer 12

barriers to entry

Question 13

ENTRY THREAT - its not just exosting firm in industry that may pose a threat it can alos come from

Answer 13

new entrats to the inustry

Question 14

ENTRY THREAT - what are the 5 barriers to entry

Answer 14

cost of entry

governemnt barroers

patents

economies of scale

access to suppliers

Question 15

ENTRY THREAT - give an example of industry eith high cost to enter

Answer 15

aircraft manufacturere

oil company

Question 16

ENTRY THREAT - government legislation can sometime s inhibit

Answer 16

a new entrant

highly regulated industries will find that incumbents have fine-tuned their business according to regulation

Question 17

ENTRY THREAT - What do patents give the holder

Answer 17

a competitive advantage whihc may make it more difficult for a new entrant to access a market

as cant copy certain ideas, images

Question 18

ENTRY THREAT - economeis of scale

Answer 18

if you cant benefit from them or quickly could acts as a barreir to entry

cuz firms have low cop and may ue this to give lower prices to customers

or may be getting higher profit margins meanign can for example reward theri staff or provide more training to make em competitive

Question 19

ENTRY THREAT - access to suppliers

Answer 19

lack of easy access to suppleirs is a potential barrier

as cant employ tactics such as JIT ? askkkkk

Question 20

ENTRY THREAT - market is easier to access when what 4 things are apparent

Answer 20

weak brand loyalty

easy access to suppliers

common tech available

low threshold to EOS

Question 21

WHAT DOES buyer power relate to

Answer 21

impact customers have on a business

Question 22

when is buyer power likely to be high

Answer 22

fewer customers more numerous the suppliers

Question 23

to sum up when is buyer power more likely to be powerful

Answer 23

few buuyers and or buys a significant proportion of ouptut

buyers have a credible backward integration threat

Question 24

to sum up when is buyer power more likey to be weak

Answer 24

many buyers

producers have a credible forward integration threat

singificant switiching costs

Question 25

long lsit what type of product would make buyer power strong and why , what may they look fr how can we compete if got low buyer power and what are hte impacts how can we get over prolem of low buyer pwoer (5 ways + considerations)

Answer 25

homogenous products as lots of witiching may occur - who can they get better deal from so you may have to compete on prices whihc reduces rev and profits or can try offer better quality but higher costs and lower profits at least in the short run to get over it try differnetiate products and position it differnetly in the mkt - but may lead to cost issues create a buyer group - clump togehter with otehr bs in your industry so you can make fewer seller find new customers/ segments which means there are more buyers increase marekting like promotion and adv start price war as leads to less seller sin mkt , improving leverage when comes to buyers

Question 26

any producing bs requires

Answer 26

suppliers

Question 27

any producing bs requires supplier which necestates

Answer 27

relaitnoships with suppleirs

Question 28

if supplier are powerful more likely to be able to

Answer 28

exert influence on the producing business

Question 29

when are suppliers more lieklt to be poweful

Answer 29

business uses single suppleir credible forward inegration threat by suppliers customers are powerful ???? high cost to switch suppliers

Question 30

when are suppliers more lieklt to be poweful 4 reaosns

Answer 30

business uses single suppleir credible forward inegration threat by suppliers customers are powerful ???? high cost to switch suppliers

Question 31

when are suppliers more likely to be weak

Answer 31

many competitive suppliers credible backward integration threat by purchasers customers are weak low cost to switch suppliers

Question 32

what startegies can we use to get lower supplier power over us

Answer 32

lock in longer contracts with suppliers and guarantee your purchasing wiht tehm - may lead to them negotioating a better deal for you lowering your costs max EOS drive up output , to bring down ACU, switch from JIT to JIC offer to merge with them - be forward vertical interation partner which guarantees a poitn of sale for suuppliers

Question 33

a bs ability to achieve profitability is affected by threat of

Answer 33

substitutes

Question 34

why is a bs ability to ahcieve profitability affected by threat of substitutes

Answer 34

gives consuemrs ability to choose alternative product

Question 35

what is a substitute product

Answer 35

one from another industry or bs that offers similar benefits to the one produced by a particular business

Question 36

give examples of substitutes

Answer 36

bottles provide alt to cans airlines provide alt to trains e readers usb fro printed boos

Question 37

good applicaiton of substiteus

Answer 37

as internete become a thing e books a thing whihc threatens book stores /puts pressure on them to adapt to change

Question 38

threat of substitiues is simply the questino of

Answer 38

are there alternatives for consumers within your industry can they go to anotehr indsustry to get simliar product

Question 39

if ive got losts of substitiutes why is that bad

Answer 39

lower your demand whihc may lad ot gfact you need to lower prices problematic for liquidity and profit

Question 40

startegies to lower substitute threat 4

Answer 40

Porter generic stargy - lower prices ot avoid switching - cost leadership create better brand loyalty - through more mkting meet customer needs evenbetter than you do - means mkt research build a moa around customers through something like prime - but unique and hard to do

Question 41

rivalry is about how much

Answer 41

competition do you have

Question 42

lots of competiiton is bad as

Answer 42

you may need to reduce prices impacts on rev and cashflow

Question 43

what are the 2 startegies to overcome intense rivalry

Answer 43

PGS cost leadership /differentaition go all tu with marketing to ensure on top of ocmp but ££££

Question 44

importance of P5F to managers in exising industr

Answer 44

help define strategy - if youc an define it you knwo where to postion yourselves and what youre value proposition is if defined stargety and ocmm to employees - youre aligned as a bs and working towards same goal

Question 45

potential bs looking to enter prtclr industry - value of PF5 for managers

Answer 45

look at it to see profitablity of industry and se whther if its even worth entering

Question 46

in terms of number and sie of firms when is ribarly more likel