Porters Five models

Question 1

Porters five models

Answer 1

-An industrial analysis tool that was developed to analyse the position of the business in the market environment

Question 2

Five forces

Answer 2

-Power of buyers
-Power of competitors
-Threats of substitutes
-Threat of new entrants to the market
-Power of suppliers

Question 3

Application of power of suppliers

Answer 3

-Suppliers that deliver high-quality products may have power over the business

-Evaluate the power of suppliers in influencing prices

Question 4

Application of Power of buyers

Answer 4

-Assess how easy it is for buyers to decrease prices

-Conduct market research to gather information about its buyers

Question 5

Application of Threat of new entrants

Answer 5

-New businesses can quickly enter the market if it takes little resources

-If barriers are to enter the market are low then it is easy for new businesses to enter the market

Question 6

Application of Power of competitors

Answer 6

-Competitors selling the same products or services have a greater impact on the market of the business

-If competitors have a unique product then they will have greater power

Question 7

Application of Threat of substitutes

Answer 7

-If the business’s product can be easily substituted, it weakens the power of the business in the market

-Improve the quality of their products or services to remain competitive

Question 8

Strategic management process

Answer 8

-Analyse the vision and mission statements

-Conduct an environmental analysis using models such as PESTLE factors

-Formulate a strategy such as a defensive strategy

-Implement a strategy using a template such as an action plan

-Monitor the implemented strategy to identify gaps

-Take corrective action to ensure goals are met