Porters Model

This gives the analysis of Porter’s model and how it can be implemented in a business organization that is introducing a new product in the market. Porter’s 5 forces model is one of the best models of analyzing a given environment that a given industry is operating in. For example, if the company is entering in the PC industry, Porter’s model can be used to find out the following about the environment:

  1. Power of the suppliers.
  2. Power that buyers posses
  3. Threats from substitutes
  4. Competitors rivalry
  5. Threats from new entrants in the market.

These factors have a substantial influence on the overall performance of the PC product that is being introduced in the market. Porter’s model is implemented by carrying out an analysis of the five factors that have been mentioned above on how each will impact the new product that is being introduced.

Competitor’s rivalry should be analyzed by identifying the market share of the competitors, the substitutes and strategies. This understanding of these factors will help the PC firm to come up with competition strategies that will help it to survive in the market.

The power of suppliers is another important aspect that needs to be taken care of as it determines the success of the company. The PC firm should analyze the source of it raw materials, cost and the likely materials that can be used as substitutes. The buyer’s power is very essential in the success of the PC product. Understanding the needs, consumers’ sensitivity to prices and the likelihood of defecting to new products will help the firm come up with strong product of high quality that will always meet customer’s specifications.

Finally the threat inhibited by substitutes is very important to be identified in terms of understanding the weakness of other products and improving on those weaknesses to avoid buyers shifting their consumption to substitutes.

Therefore Porters model is essential in analyzing an industry environment.

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