Porter s Five Forces Model - amazonia.fiocruz.br

Porter s Five Forces Model - apologise

Air Liquide is a French multinational which supplies industrial gases to various industries. It was founded in and now operates over 80 countries in the world Air Liquide, It is considered to be a world leader in industrial gas and related services. It provides services to various industries including electronics manufacturers, the health industry, and the chemical industry. It provides services to larger industries such as chemical, metal, pharmaceuticals, automobile makers, refining, and energy. Porter s Five Forces Model

For more than thirty years, the Five Forces Analysis has become the standard way to analyse an industry, look at changes that are taking place and to think about how a business can best position itself to defend against damaging forces and maximise opportunities where the forces are weak.

Threat of new Entrants

Operating in an industry with an attractive structure as defined by the five forces analysis model. In simple terms, an attractive industry is about the balance of supply and demand. If demand is greater than supply, then businesses should find it easy to make a profit. If supply is greater than demand, then the business needs a competitive advantage to survive the competition process. Michael Porter argues that the Five Forces analysis model identifies the key factors which determine the average profitability of an industry.

The roots of the Five Forces analysis model lie in industrial economics and represent many of the key assumptions in the model of perfect competition. These assumptions keep the supply and demand within a market in equilibrium and stop firms who compete n it from earning big profits or making big losses. Customers, suppliers and competitors Poryer for the profit from the value created by the industry which is limited by substitutes or alternative solutions to the underlying customer needs.

Flexible Pricing

I believe that the Five Forces analysis model gives more insight when you are considering entering a new market than for small businesses who are already firmly entrenched in established markets. Here is a 13 minute video of Michael Porter explaining the five forces model and why it is still relevant after it was first introduced in Highly recommended.

This problem of putting the Five Forces model to work has led to people struggling to gain much insight about what to do next in their current markets. It helps to use the model with PEST Analysisboth looking back over how the industry has evolved over recent years and forward as you think about how it could Porter s Five Forces Model, perhaps even using scenario planning.

However, I do believe that any business that occupies a strategic position in its market should periodically work through the five forces model and see what new insights it brings. These would be included in your SWOT analysis.]