Porter’s Five Forces Analysis Porter’s Five Forces model entails the analysis of the five forces and the way each force affects the company’s financial performance. The five forces model is simple and powerful for Gap Inc. to understand where power lies. It assists in ensuring the company understands its current competitive position strength and the strength and weaknesses of new positions. Knowledge of where power is ensures the company can take advantage of their position, avoid making wrong decisions or moves, and enhance their weak positions. The tool assists in identifying the profitability potential of new or current products in specific situations. The first force is supplier bargaining power. The company assesses how suppliers can increase or decrease the company’s product prices. The increase or decrease is dependent on the uniqueness of a product, the suppliers available, suppliers’ control, and strength over a company, and the cost of changing from one supplier to another. A company with few suppliers will need more assistance from the suppliers, which gives the supplies more power and control. Gap Inc., like most fashion industry companies, acquire their products from suppliers …show more content…
If a company’s resource is invaluable, the company should outsource it. If the resource is not rare but valuable, the company is in a state of competitive conformity. If the resource is rare and valuable but can be cheaply imitated, the company has temporary competitive advantage. If the resource is rare, costly to imitate, and valuable but the company cannot organize its processes, the resource becomes costly for the company. If the company can manage itself and its temporary competitive advantage, it becomes permanent competitive