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Industry Competition: Michael Porter's Five Forces Model

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The five forces industry competition also known as the five forces model or Porter’s model was developed by Michael Porter in the late 1970’s. It is a tool utilized in businesses to analyze the industries current profitability and attractiveness from the outside-in perspective. In this era of technology, this model may not be as precise or practical, as it was when it was created years ago, for technology has taken production, marketing and industries in general, to another level. Companies have developed significantly over the years with easy access and affordable rates to internet services, with both the companies and customers being able to do business from the comfort of their homes or offices. Important to note is how technology…show more content…
It notes that stiff competition can reduce the potential profit of like companies. Firms must determine the strategy that will be utilized to gain and maintain the upper hand in the industry, as it relates to price, marketing, competition and the introduction of new and innovative products into the market. The more a company senses competition the intensity of its strategy may increase as it does not only respond to other firms, but also to the industry as a whole. It is natural for firms to respond to competitive moves made by its rival as it will have an effect albeit positive or negative on the industry. Firms may be forced to supply the demands for cheaper but more reliable products or to create differentiated products to maintain the competitive…show more content…
Based on this companies are forced to position their product against its substitute through marketing and promotions to convince current costumers and reassure potential ones that the industry product is the viable option. Note that this can be a collective marketing strategy by all those currently in the industry for it can have an impact on them all. There are some substitute products that must be considered these includes those that can improve price-performance and those that are produce by an industry that is already enjoying high profits as an increase in competition in an industry can cause a price reduction or in increase in performance. It is clear that in the case study Srinivasan Services Trust (SST), that there is no threat of substitutes for as stated earlier the group is not even maximizing its market potential and the niche still exist. This group of ladies can tap into and diverse into much more products, however it is noted that their limited knowledge and will makes them comfortable with their current share of the market. It is obvious that with the right leadership and interest, these ladies can increase their market share and profit, but the desire to do so must be
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