It is important to note that Porter’s ‘winning formula’ consists of selecting an industry to excel in, performing an analysis of its industry position, and maintaining this position to generate competitive advantage. The strategy here is to focus on the industry and outcompete rivals. The internal workings and assets of the firm is not of concern. As a response to Porter’s framework, the discipline of business strategy has developed a model concerned with matters internal to the firm. The resource-based model ignores the idea of the industry and focuses on how the unique capabilities and resources of a firm provide the basis for strategy.
Porter’s five forces model has been advocated and very influential for a long time in the field of strategy development within business schools. However compared to SWOT analysis, there is still little awareness of the model amongst mainstream managers. It has been criticised for being relatively abstract, lacking practicalities and highly prescriptive etc. (Grundy, 2006). In addition, according to this model a company is able to choose how it wants to compete based on the match between its competitive advantage and the target market.
4 FORMULATION OF STRATEGY FOR THE SELECTED COMPANY (NALCO) 4.1 Formulations of the strategic options According to Wheelen and Hunger (2012, pp. 182), the TOWS matrix illustrates how the external opportunities and threats facing a particular corporation can be matched with that company’s internal strengths and weaknesses to result in four sets of possible strategic alternatives. Weihrich (1982) developed TOWS as the next step of SWOT in developing alternative strategies. The authors Ravanavar and Charanthimath (2012), further reinforced that, TOWS matrix provides the means to develop strategies based on logical combinations of factors relate to internal strengths (or weaknesses) with factors related to external opportunities (or threats). TOWS matrix identifies four conceptually distinct strategic groups: (1) Strength-Opportunity (SO), (2) Strength-Threats (ST), (3) Weaknesses-Opportunities (WO), and (4) Weaknesses-Threats (WT), for creating the alternative strategies.
Firstly, the Boston Consulting Group (BCG) matrix that concentrate the market position of different products. Secondly, the experience curve and the Profit Impact of Market Strategies model which identified a number of strategic variables. Furthermore, competitive advantages model (Porter, 1985) which focus on five different forces in environment of organization, but suit with only stable market. Generic strategy was developed strategies under this school, especially it can identify position in the market. Advantages: -Provide content in a systematic way to the existing way of looking at strategy -Particularly useful in early stage of strategy development, when date is analyzed -This school emphasis on analysis and calculation can be a very strong support to the strategy development process -This strategy suit with big businesses or organization which have ability for operate effective market research in the environment
This will give opportunity to assess attractiveness of focused industry to managers and elaborate into and If it is feasible or profitable to enter the new market and to see probable risk before entering.The other benefit of the five forces model is that We can feed the other strategic managemeny tools such as value chain ,strategic canvas or swot with findings and outcomes of Five Forces
A firm strategic position is defined by well performance of its similar activities to other rivals. So its performance can be evaluated in an industry where these organizations compete. Organizations make their assessment of external environment and competitive advantage to formulate strategy. Basically there are three major sources of market view theory for better performance. They are monopoly, barriers to entry and bargaining power.
Introduction – through the PESTEL analysis and Porter’s five force analysis, the project embarks on building up a strong relation between the company and its clients. The company Morrisons has a strong base and it needs to expand its branches. The project explores the possibilities of expansion of the company into the new market and mentions the threats which have to deal with, to make the most of the opportunities. The SWOT analysis formed after the PESTEL analysis and Porter’s five forces analysis reveals that though there are immense possibilities for the company, but it has to be alert always and keep check on its own growth and regulatory norms. The wide variety of products available in the market confuses the customers.
Porter 's Five Forces of Competitive Position Analysis were developed in 1979 by Michael Porter of Harvard Business School as a simple framework for assessing and evaluating the competitive strength and position of a business organization (CGMA ORG). The theory concept is similar to SWOT analysis, usually used to analyze market and business environment. However instead of analyzing the strength, weaknesses, opportunities and the threats, Porters five forces analyses and helps understand the power balance, where the power lies, and identify potential profitability. This analysis is important to understand the strength of an organization’s current competitive position, and the strength of a position that an organization may look to move into.
Strategic planning frameworks like PLOC (Ilbury & Sunter, 2001, p. 140) combined with SMART tools assist management to set objectives and determine a course of action for achieving those objectives based on the scenario roadmaps. Ilbury and Sunter (2001, p. 114) raise an important point about scenario planning when they quote commander Jim Lovell referring to the Apollo 13 mission as a "successful failure" – you must always re-assess and adjust your situation and the possible scenarios. The motivation lies in the “wildcards” which could change the landscape at any moment. Benefits of revisiting forces managers to revisit the original scenarios in order to develop an understanding of what worked and what didn’t. It also assist to highlight new opportunities and threats that have been created since the original scenarios were developed and provides valuable input to future
The work activities are distributed to various teams with one common goal. The unitarist perspective has a large focus on teams. The use of teams in an organisation will result in increased productivity. This gives the organisation a competitive advantage as they are operating more efficiently. As the teams become more productive, the organisation becomes more successful.