Porter's Five Forces Model

A framework used to analyze the competitive forces that determine an industry's attractiveness. It helps companies understand industry dynamics, identify potential threats, and strategize for sustainable competitive advantage.

The intensity of competition between existing companies in an industry. It's higher when many competitors are similar in size, power, or when the industry isn't growing quickly.

The threat of new companies entering an industry. It's lower when there are significant obstacles like high setup costs, economies of scale, or strong brand loyalty.

The threat of alternative products or services meeting the same needs. It's high when there are many options available to customers in the market.

The power that suppliers have in an industry. It's strong when there are few suppliers, they offer unique products, or switching to another supplier is difficult.

The power that buyers have in an industry. It's strong when buyers purchase large quantities, products are similar, or switching suppliers is easy.

A tool that breaks down a company's activities into primary and support activities to understand how value is created and delivered to consumers.

These are the activities directly involved in producing and delivering the product or service. They include inbound logistics, operations, outbound logistics, marketing and sales, and service.

Activities that support the primary activities, such as technology development or human resource management.

Resources that are tangible, physical assets like buildings or machinery. They can be easily valued.

Resources that are intangible, non-physical assets like brand reputation or intellectual property. They are often more valuable than tangible assets.

The skills, knowledge, and expertise of the employees within a company.

The ability of an organization to combine its resources, processes, and people to achieve a desired outcome.

A resource is scarce when it is rare or not widely available to competitors. Makes it a competitive edge.

The ability of a resource to be used in different ways or to generate multiple revenue streams. Improves profitability.

Focuses on the real assets (tangible, intangible, and human) used by an organization to perform tasks and create value. It considers what resources are needed, their quantity, and their location to achieve operational goals.

A question in the Resource View focused on determining the optimal quantity of resources to invest in.

A question in the Resource View focused on understanding the ideal time to increase or decrease the use of resources.

A question in the Resource View focused on identifying the most suitable types of resources for specific tasks.

A question in the Resource View focused on determining the best location for resources to maximize efficiency and effectiveness.

Focuses on how organizations transform inputs into outputs using structured, recurring activities. It emphasizes the value-adding processes and their relationships to one another.

A question in the Process View focused on determining when to outsource activities and how to manage external suppliers.

A question in the Process View focused on identifying the technologies needed to support organizational processes.

A company's abilities, determined by its resources, processes, and values. It defines what the company can do well and influences the products it can offer effectively.

The total cost of operating a business, taking into account factors like resources, production, and distribution.

The time needed to transform inputs (raw materials, ideas) into outputs (products, services).

The ability to consistently deliver high-quality products or services, meeting customer expectations.

The capacity to adjust production, processes, or output based on changing demands or circumstances.

A phenomenon where small changes in customer demand result in amplified fluctuations further up the supply chain, leading to excess inventory, inefficient resource use, and increased operational costs.

The Bullwhip Effect is undesirable because it leads to higher inventory costs, inefficient resource use, and increased operational costs. It disrupts the smooth flow of goods and creates unnecessary expenses.

Operations strategy aligns with the overall business strategy to deliver value. It considers cost, time, quality, and flexibility to achieve competitive advantage.

A phenomenon where small fluctuations in customer demand at the end of the supply chain are amplified as they move upstream to suppliers. This results in larger and more erratic orders, creating inefficiencies and increased costs.

Companies use historical data to predict future demand and hold extra inventory to protect against unexpected surges in demand.

Companies combine multiple orders into a single, larger order to reduce shipping and administrative costs.

Companies buy in large quantities during sales and discounts to take advantage of lower prices. This can lead to artificial demand spikes and troughs.

During shortages, companies increase their orders to secure enough supplies. However, this can lead to over-ordering and an unpredictable demand pattern when the shortage ends.

Sharing real-time demand information across the supply chain allows companies to make more accurate forecasts and reduce their reliance on independent predictions.

Maintaining consistent pricing strategies helps eliminate demand spikes caused by promotions or discounts, resulting in more stable demand patterns.

Collaborating with supply chain partners to share information, coordinate production, and optimize delivery schedules can reduce lead times and improve overall efficiency.

Using information systems to speed up order processing and better coordination between supply chain partners.

A situation where a resource is limited or in short supply, making it valuable and difficult for competitors to obtain.

Vendor-managed inventory systems where suppliers manage inventory levels for their customers. This helps ensures that inventory levels match actual demand, reducing over-ordering and safety stocks.

During shortages, products should be allocated based on past sales instead of inflated orders, preventing over-ordering and variability upstream in the supply chain.

The development of stand-alone solar power systems provides a sustainable and cost-effective solution for generating electricity in remote areas.