Strategic management explain porter’s five force model using example
Porter’s Five Forces Model is a framework used to analyze the competitive environment in which a firm operates, and assesses the potential for profitability. Using Apple Corporation as an example, this model can be applied as follows:
1. Threat of New Entrants: The threat of new entrants into Apple’s market is low due to high barriers of entry such as the presence of strong brand loyalty, high capital investment associated with research and development, and economies of scale that are difficult to achieve quickly.
2. Bargaining Power of Buyers: Buyers have some bargaining power over Apple due to its large customer base allowing them to easily switch between competitors, but ultimately Apple has a lot more control over pricing because it offers products with unique features not found elsewhere making them highly desirable for consumers who are willing to pay premium prices for their products.
3. Bargaining Power of Suppliers: The bargaining power of suppliers is moderate since there exist many suppliers offering similar components and services needed by Apple in order to produce their products meaning they can switch between different sources if one supplier fails to meet their requirements or drive down prices too much.
4. Threat of Substitute Products/Services: The threat posed by substitute products and services available on the market is relatively low since most other brands are unable to offer devices with comparable quality at similar price points which makes it difficult for customers looking for alternative options without sacrificing performance or spending more money than necessary on another device from another brand..
5. Threats from Competitors: There exists a large degree competition amongst phone manufacturers making threats from competitors very real; however, it should be noted that Apple still commands a majority share in terms markets due largely thanks its innovation when launching new models which keeps users loyal while simultaneously drawing in new customers each time it releases something new onto the market leading up further strengthening its position within industry despite heavy competition present across all levels.