Honda Porter's Five Forces Analysis

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Porter's 5 Forces model is a framework of analysis that helps to explain why different industries are able to sustain different levels of profitability. This framework is also frequently used to determine an industry’s structure to create corporate strategy. It determines and analyzes five competitive forces that shape every industry, and helps in identifying an industry's weaknesses and strengths. These five undeniable forces include rivalry among competitors, potential of new entrants into the industry, power of suppliers, power of customers and threat of substitute products. Hereby we will examine the development of competitive advantage and the business environment of Honda according to this model. First of all, rivalry among competitor is the force that shows the competition…show more content…
It is essential for Honda to keep a close eye on its competitors in order to stay competitive in the market. Competition in the automobile industry is extremely intense and it can be brutal at times. By closely monitoring what other competitors have been doing, it enables Honda to forecast the future moves and strategies of its competitors. This is extremely beneficial as it allows Honda to produce products with higher quality to satisfy the demand from the public. For instance, Honda and Toyota both offer vehicles that are very similar and competitive with each other in terms of pricing, safety, reliability, and other objective factors. Both brands also have rather loyal followings. Thus, Honda should study the customer base of Toyota or other competitors, as well as the suppliers that they plan to partner with. It gives Honda an overview of the types of strategies they are likely to develop and implement in the business. In addition, we believe competitive monitoring is crucial for Honda to create strategies beforehand in order to reduce any potential threats to its
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