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Five Forces

Essay by   •  May 22, 2013  •  Essay  •  402 Words (2 Pages)  •  1,134 Views

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Great job! researching Michael Porter's Five Forces Model. According to Business Driven Technology, in order for a business to remain competitive they must be able to respond to all the five forces depicted by Michael Porter (Baltzan/Phillips, 2010). Understanding these forces will enable the company to identify the potential opportunities, gain or create a competitive advantage and deter rivalry from their competitors (Baltzan/Phillips, 2010). The fundamental relationship the model has with e-commerce is the same, but with a twist. In the beginning of the unit they showed business magazines, which were focused on the speed and value of technology, like "How fast is Your Business". In today's business world having the right tools to be and stay competitive gives you the upper hand in the market. The internet gives businesses the agility that enables a company to be flexible. With the information about their competitors, basically at their finger tips, they are able to adjust their business strategies to accommodate the ever changing markets.

I have to agree with the article Olandis chose, with the fact that the model does not account for all forces, especially in a world as dynamic as the one. The model does not account for the factors that affect the forces. One factor or force that affects everything in the world that we know today is the force of nature. I am going to put the human factor as well as the forces of Mother Nature in the area. Let's look, for example, at the tragic events that happened recently in Japan. The earth quake sent a ripple effect through many markets, but I am going to focus on the Automobile Industry. Vehicle production came to a crawl for Toyota and Honda after the earthquake. However, on the other hand Nissan and Kia had more vehicles out in the market and were able to take advantage of this and grabbed a greater portion of the market sales (Bloomberg, 2011). Companies analyzing the force of rivalry among existing competitors could not have predicted such an event would affect their market share. Based on these events the traditional intermediation described by Michael Porter was highly affected (Karagiannopoulos/ Georgopoulos/ Nikolopoulos, 2005). Once the supply chain has been repaired, Toyota and Honda will have to create a business plan to recapture the market share loss. This can be achieved possible through customer incentives, which can be launched on the internet.

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