Porter's five forces, generic strategies, value chain, resource-based view and sustainable advantage.
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- What framework identifies the structural attractiveness of an industry and intensity of competition?
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Porter's Five Forces model- What are the five forces in Porter's Five Forces model?
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Threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and competitive rivalry among existing firms- What factors determine the threat of new entrants to an industry?
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Barriers to entry such as capital requirements, economies of scale, brand loyalty, access to distribution channels, and switching costs- What is bargaining power of suppliers?
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The ability of input suppliers to raise prices, reduce quality, or otherwise assert control over firms, influenced by supplier concentration and switching costs- What is bargaining power of buyers?
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The ability of customers to demand lower prices or higher quality, which increases when few buyers exist, products are undifferentiated, or switching costs are low- What does threat of substitutes refer to?
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The risk that alternative products or services meet the same customer need, limiting a firm's pricing power and growth potential- What factors determine the intensity of competitive rivalry?
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Industry growth rate, exit barriers, excess capacity, product differentiation, and the number, size, and diversity of competitors- When is an industry most attractive according to Five Forces analysis?
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When barriers to entry are high, suppliers and buyers have low bargaining power, substitutes are weak, and competitive rivalry is moderate- How can firms use Five Forces analysis to develop strategy?
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To identify the most powerful forces threatening profitability, position defensively against those forces, or find structural gaps and niches where competition is weaker- What are Porter's three generic strategies?
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Cost leadership, differentiation, and focus (or niche strategies)- What is cost leadership strategy?
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Competing by achieving the lowest cost position in an industry, enabling a firm to charge lower prices or earn higher margins than rivals- What are sources of cost advantage?
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Economies of scale, operational efficiency, tight cost control, process innovations, learning curve effects, and access to low-cost inputs- What is differentiation strategy?
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Competing by creating unique products or services that customers perceive as valuable and distinct, justifying premium prices- What dimensions can be used for product or service differentiation?
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Quality, features, brand reputation, customer service, design, technology, durability, and distribution methods- What is focus strategy?
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Competing by targeting a specific market segment or niche with either cost leadership or differentiation advantages tailored to that segment
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