Porter's 5 Forces in Business Competitiveness

Business Competitiveness Management

Porter's 5 Forces

• Analyzing industry structure and competitiveness
• Five forces that determine industry attractiveness:
  1. Threat of New Entrants: Barriers to entry, economies of scale, and capital requirements
  2. Bargaining Power of Suppliers: Supplier concentration, switching costs, and supplier substitutes
  3. Bargaining Power of Buyers: Buyer concentration, buyer switching costs, and buyer information
  4. Threat of Substitute Products or Services: Substitutes availability, substitutes performance, and substitutes price
  5. Competitive Rivalry Among Existing Competitors: Industry growth rate, industry concentration, and product differentiation

PEST Analysis

• Analyzing external environment and its impact on business
• Four factors that affect business:
  1. Political: Government policies, laws, and regulations
  2. Economic: Economic growth, inflation, and interest rates
  3. Social: Demographics, lifestyle, and cultural trends
  4. Technological: Technological advancements, innovations, and disruptions

Product Life Cycle

• Analyzing product development and marketing strategies
• Four stages of product life cycle:
  1. Introduction: Product launch, high investment, and low sales
  2. Growth: Rapid sales growth, increasing competition, and profit improvement
  3. Maturity: Sales growth slows, high competition, and profit maintenance
  4. Decline: Sales decline, competition decreases, and profit reduction

ADL Matrix

• Analyzing product portfolio and market attractiveness
• Matrix with four quadrants:
  1. Stars: High market growth, high market share
  2. Cash Cows: Low market growth, high market share
  3. Question Marks: High market growth, low market share
  4. Dogs: Low market growth, low market share

Management Function according to H. Fayol

• Analyzing management functions and responsibilities
• Five primary functions:
  1. Planning: Setting goals, objectives, and strategies
  2. Organizing: Allocating resources, assigning tasks, and structuring organization
  3. Commanding: Directing and motivating employees
  4. Coordinating: Integrating and synchronizing activities
  5. Controlling: Monitoring and correcting performance

Business Competitiveness Management

Porter's 5 Forces

• Analyzing industry structure and competitiveness to determine industry attractiveness
• Threat of new entrants depends on barriers to entry, economies of scale, and capital requirements
• Bargaining power of suppliers is determined by supplier concentration, switching costs, and supplier substitutes
• Bargaining power of buyers is influenced by buyer concentration, buyer switching costs, and buyer information
• Threat of substitutes depends on substitutes availability, substitutes performance, and substitutes price
• Competitive rivalry among existing competitors is affected by industry growth rate, industry concentration, and product differentiation

PEST Analysis

• Analyzing external environment to identify opportunities and threats
• Political factors include government policies, laws, and regulations
• Economic factors include economic growth, inflation, and interest rates
• Social factors include demographics, lifestyle, and cultural trends
• Technological factors include technological advancements, innovations, and disruptions

Product Life Cycle

• Analyzing product development and marketing strategies
• Introduction stage is characterized by product launch, high investment, and low sales
• Growth stage is marked by rapid sales growth, increasing competition, and profit improvement
• Maturity stage is characterized by sales growth slowing, high competition, and profit maintenance
• Decline stage is marked by sales decline, competition decreasing, and profit reduction

ADL Matrix

• Analyzing product portfolio and market attractiveness
• Stars have high market growth and high market share
• Cash cows have low market growth and high market share
• Question marks have high market growth and low market share
• Dogs have low market growth and low market share

Management Function according to H. Fayol

• Planning involves setting goals, objectives, and strategies
• Organizing involves allocating resources, assigning tasks, and structuring organization
• Commanding involves directing and motivating employees
• Coordinating involves integrating and synchronizing activities
• Controlling involves monitoring and correcting performance