Describe what determines competitiveness within a particular industry using Porter's model for industry analysis. Provide an example for at least three of the five forces in the model.
What will be an ideal response?
Competitiveness within a particular industry originates in the five primary competitive forces in the firm's environment:
1. Threats of new entrants: for Kraft, new entrants might be store brands or Annie's.
2. Bargaining power of suppliers: companies without multiple suppliers are at the mercy of the one.
3. Bargaining power of buyers: customers who use the Internet to shop around are more able to negotiate a better price.
4. Threats of substitute products or services: for big oil companies, firms making ethanol provide a substitute product.
5. Rivalry among competitors: for Coca-Cola, Pepsi is an established rival.
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