The Effects of External and Internal Factors On Competitiveness
Porter’s five forces:
1. Competitiors – intensity of rivarly among firms in the industry
2. New entrants – threat of new competitors entering the market
3. Suppliers – bargaining power of suppliers
4. Customers – bargaining power of buyers
5. Substitutes – threat of substitute products or services
Describe Porter’s five forces relations to an organization’s internal and external enviornment The Effects of External and Internal Factors On Competitiveness
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The five forces consider both external and internal factors that affect a company’s competitiveness. Thus, each force is related to the internal and external environment of the organization:.
Competitors – The intensity of competition among firms within an industry: This force describes the competitive pressure a firm faces from other firms operating in the same industry. These include factors such as price competition, marketing strategies, product differentiation, and customer loyalty. An organization’s internal environment, such as B. Their resources, skills and core competencies can affect their ability to compete effectively The Effects of External and Internal Factors On Competitiveness
New Entrants – The Entry Threat of New Competitors: This force takes into account the barriers to entry for new players in the industry. Factors such as economies of scale, capital requirements, regulatory requirements and brand awareness can affect the competitiveness of new entrants. the internal environment of the company; Innovation, branding, and customer loyalty levels can affect your ability to defend against new entrants.
Supplier – Supplier bargaining power: This power takes into account the power that the supplier has over the organization. Factors such as the number of suppliers, availability of alternative products, and switching costs can affect a supplier’s bargaining power. An organization’s internal environment, such as B. Supply, his chain management and procurement strategy can affect its ability to negotiate favorable terms with suppliers.
Customer-Buyer Bargaining Power: This power takes into account the power the buyer has over the organization. Factors such as the number of buyers, switching costs, and availability of alternative products can affect the bargaining power of buyers. An organization’s internal environment, such as customer relationship management and marketing strategies, can affect its ability to retain and satisfy customers.
Substitutes – Threat of Substituted Products or Services: This unit considers the threat posed to the organization by substitute products or services. Factors such as the availability of alternative products, switching costs, and product differentiation can affect the threat level of alternative products. An organization’s internal environment, such as B. Level of innovation and product development, can affect its ability to develop unique products or services with few substitutes.
the Five Forces framework helps organizations identify and assess external factors that influence their competitiveness. An organization’s internal environment, such as B. Their resources, skills, and strategies, can affect their ability to respond effectively to these external forces. The Effects of External and Internal Factors On Competitiveness