According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of five forces. Based on the details given for each Porter 5 forces in the table below, justify the strategic significant and industry profitability for each forces. Porter 5 Forces Strategic Details Industry Significant Profitability (High/Low) (High/Low) Rivalry among • There are a huge number of Competing Firms companies offering the same products. • Firms compete for market share in a saturated market. Potential Entry of • Low barriers to entry. • Easy for new firms to enter the pizza industry as the initial investment is not very high New Competitors and government deregulation. Potential • There are a lot of substitute to pizza in the market. Example, frozen pizza is a substitute for Development of Substitute Products delivery pizza. Bargaining Power of • There are a huge number of Suppliers suppliers with low switching costs for firms to change their suppliers. • Customers can easily find any substitutes for pizzas. Bargaining Power of Buyers

According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of five forces. Based on the details given for each Porter 5 forces in the table below, justify the strategic significant and industry profitability for each forces. Porter 5 Forces Strategic Details Industry Significant Profitability (High/Low) (High/Low) Rivalry among • There are a huge number of Competing Firms companies offering the same products. • Firms compete for market share in a saturated market. Potential Entry of • Low barriers to entry. • Easy for new firms to enter the pizza industry as the initial investment is not very high New Competitors and government deregulation. Potential • There are a lot of substitute to pizza in the market. Example, frozen pizza is a substitute for Development of Substitute Products delivery pizza. Bargaining Power of • There are a huge number of Suppliers suppliers with low switching costs for firms to change their suppliers. • Customers can easily find any substitutes for pizzas. Bargaining Power of Buyers

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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