Examples Of Porter's Five Forces - Harappa Education

One more example of Porters Five Forces is the analysis of Uber. The analysis shows that the ride-hailing app's customers enjoy high bargaining ... GoBackToHarappaBlogs ExamplesOfPorter’sFiveForces Kajalwantedtostartherownlineofjewellery.Shewasasuccessfulgarmenttechnicianandanexperiencedhandin… September6,2021|4minsread Kajalwantedtostartherownlineofjewellery.Shewasasuccessfulgarmenttechnicianandanexperiencedhandinthegarmentindustrybuthadlittleknowledgeabouttheornamentmarket.Shewasunsureaboutdemandandsupply,competitionandscopeofprofitability.Herpartner,whohadrecentlycompletedaprograminnetworking,advisedhertolookintoaPorter’sFiveForcesmodelexampletofindouthowconducivethemarketwasformakingprofits.UsingPorter’s5Forcesanalysisexample,Kajalrevisedherobjectivestoexpandhernetworkbeforestartinghernewventure.  Anorganizationmustanalyzethecompetitiontomeetitsobjectivesandmakeprofits.Porter’sFiveForcesmodelisaframeworktoanalyzetheintensityofcompetition,theattractivenessofamarketandtheprofitabilityinagivenindustry.APorter’sFiveForcesmodelexampleisespeciallyusefulifyou’replanningtostartanewbusinessorlookingtoenteranewindustry.AnexampleofPortersFiveForceswillshowhowthisframeworkhelpsinanalyzingthelevelofcompetitioninacertainmarket. Wanttoknowmore?Readon.   WhatAreThePorter’sFiveForces? ExamplesOfPorter’sFiveForces WhatAreThePorter’sFiveForces? Toanalyzeanindustryindepth,executivesmustknowthefactorsthatinfluenceit.APorter’sFiveForcesmodelexamplewillshowthatcompetitiveforcesarenotgeneratedbycompetitorsalone.Rather,theydependonfivemajorforces.Theseare: Bargainingpowerofsupplierstocontroltermsofservices,qualityandpricesofgoods.Reducedqualityorhigherpriceswillresultinreducedprofitability.  Bargainingpowerofbuyersforaparticularproduct.Thebuyerismorelikelytobargainiftheproductisn’tcheaporifthereareseveralalternatives. Thethreatofnewplayersenteringamarketandgainingmarketshare. Thethreatofsubstituteproductsorservicesthatcaneasilymakeacustomerswitchsides. RivalryamongexistingcompetitorsisanimportantforceinanyPorter’sFiveForcesmodelexampleasmorecompetitorsmeanmoreoptionsforcustomersandgreaterrivalries. AcarefullookatanexampleofPortersFiveForcesrevealsthatthismodelcanpredictwhetheracustomerwillshiftfromanenergydrinktocoffeeifit’savailableforhalftheprice!  ExamplesOfPorter’sFiveForces Thisframeworkactsasausefultoolformanagersofdifferentorganizationsacrossvariousindustries.Let’stakealookattheseexamplesofthefiveforcesanalysistofindouthowitcanhelpinanalyzingthecompetition,suppliersandcustomers: 1.Porter’sFiveForcesexampleIATA OneexampleofPortersFiveForcesistheVision2050ReportbytheInternationalAirTransportAssociation(IATA).Thereportshowshowairlinesmakedismalprofitswhilevendorsandcustomersmakesignificantgains.Airfaresbecomecheaper,travelbecomessaferandthequalityofon-boardproductsgetbetter.Thepriceoffuelfluctuatesandisusuallyhigh.Priceofmaintenancegoesupandotherplayerstendtoraiseservicecostsatregularintervals.Thefiveforcesanalysisinthereportrevealsdetailsrelatedtooperatingintheaviationindustry. 2.Porter’sFiveForcesexampleUber OnemoreexampleofPortersFiveForcesistheanalysisofUber.Theanalysisshowsthattheride-hailingapp’scustomersenjoyhighbargainingpower,lowertransactioncostsandshorterwaitingtime.Atthesametime,competitionishighastherearemultipleplayersinthemarketandthecustomeriswell-informed.It’shighlylikelythatacustomerwillbookadifferentcabifdemandandpricesarehigh. 3.Porter’sFiveForcesexampleStarbucksCoffee WithPorter’sFiveForcesexampleStarbucksCoffeetrackedthekeycharacteristicsoftheindustrycompetition.Starbucksfacesstiffcompetitionduetoalargenumberoforganizationsinthemarket,moderatevarietyofproductsandhighprobabilityofcustomersswitching.Theyhaveasmallersizeofbuyersandhighprices,coupledwithsubstituteproducts,whichincreasechancesofcustomersswitching.UsingPorter’sFiveForcesexampleStarbucksCoffeealsoevaluatedthebargainingpowerofsuppliers.Theybuyfromdifferentsourcestoavoidmonopoly. Asyoucansee,anexampleofPortersFiveForcesanalysiscanlaydowntheentireindustryscenario.Asamanager,businessleaderormarketingexecutiveyoumustusePorter’s5Forcesanalysisexampletodeterminewhetheraproductorservicewillbeprofitable.  HarappaEducation’sExpandingNetworkscourseisaprofessionalnetworkingprogramthatpreparesmanagersandexecutivestobuildarobustprofessionalnetwork.Learnwaystoanalyzemarketsthatwillallowyoutoexpandyourorganization’sconnections.Usethisprogramtolearntocollaborateandbuildauthenticrelationships.Utilizenetworkstomineyourindustry,buildtrustandsurpassthecompetition.TryHarappatoday!    ExploreHarappaDiariestolearnmoreabouttopicssuchasPurposeofPorter’sFiveForcesModel,HowtodoIndustryAndCompetitiveAnalysis,HowtoreducewithThreatOfSubstitutionandThreatOfNewEntrantstobuildstrongprofessionalnetworks.