Strategic Management and Bargaining Power Essay

Submitted By 23Debbie
Words: 352
Pages: 2

Porter's Five Forces Model
Accordingly to Maxi-Pedia they claim, Michael Porter discuss how the “Porter's five forces model”, influenced the businesses framework and industry (“Maxi-Pedia”, 2012, p. 1). These five forces are used for business strategy tools for business looking for the edge the system can help with, information needed to grow into a better E-Business. E-Business companies can use these points to create their plans, investment and future strategy. (1) Risk of new entry by potential competitors:
Bargaining powers of buyers
Bargaining power of suppliers
Rivalry among other existing players

(2) Extent of rivalry among established firms:
How fast does the industry grow?
How is the industry concentrated?
How do customers identify themselves with your brand?

(3) Bargaining power of buyers:
Price sensitivity.
How loyal are customers to your brand?
What information buyers have?

(4) Bargaining power of suppliers:
Is there a monopoly?
How strong is the position of sellers?
How much do you take from each supplier?

(5) Threat of substitute products:
How much does it cost the customer to switch to competing products or services?
How likely are customers to switch?
What is the price-performance trade-off of substitutes?

From my understanding the E-Business or company using these five factors to figure out what they are doing from a customer’s point, will determine how they are doing with repeat customers shopping at your