Especially, competitive strategy should be based on an understanding of industry structures, and the way they change. Michael Porter provided a frame work that models an industry as being influenced by five forces. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization.
In the case of Microsoft, these external factors are an effect of the activities of other firms in the computer hardware and software industry. Such factors are also based on the decisions of customers and suppliers.
In relation, substitutes influence Microsoft. To maintain its market position as a major competitor, Microsoft must consider the issues outlined in this Five Forces analysis of the technology business.
However, a variety of issues affect Microsoft, as shown in the details of the Five Forces analysis. Competitive rivalry or competition strong force Bargaining power of buyers or customers moderate force Bargaining power of suppliers moderate force Threat of substitutes or substitution weak force Threat of new entrants or new entry moderate force Recommendations.
In this regard, the company must implement strategies that boost competitive advantage. This Five Forces analysis shows that the company must include the bargaining power of buyers, the bargaining power of suppliers, and the threat of new entry in strategic formulation.
The threat of substitutes is a minimal consideration, although Microsoft can also work on this force to enhance product attractiveness. Competitive Rivalry or Competition with Microsoft Corporation Strong Force Microsoft needs to effectively compete to remain successful.
This aspect of the Five Forces analysis determines the effects of firms on each other and the related conditions of the industry environment.
In the case of Microsoft, the following external factors and their intensities exert the strong force of competition against the company: These technology firms are aggressive in terms of their rate of innovation and their marketing campaigns.
Microsoft must also consider the strong force based on the high diversity of firms.
In this aspect of the Five Forces analysis of Microsoft, external factors support the strong force of competitive rivalry, which is a priority issue in strategic decision-making. The impact of customers or consumers on the computer hardware and software industry environment is evaluated in this aspect of the Five Forces analysis.
Microsoft must respond to the moderate force of the bargaining power of customers, based on the following external factors and their intensities: This external factor exerts a weak force on Microsoft and its industry environment. For instance, such information is easily available from online sources.
Based on the external factors in this aspect of the Five Forces analysis, Microsoft Corporation must include the moderate force of the bargaining power of customers as a significant concern in its business strategies. This aspect of the Five Forces analysis outlines the influence of suppliers on the computer hardware and software industry environment.
The following external factors and their intensities maintain the weak force of the bargaining power of suppliers on Microsoft Corporation: The moderate overall supply also creates a significant but limited force on Microsoft. The intensity of this force could increase if the overall supply decreased.
Thus, the external factors in this aspect of the Five Forces analysis of Microsoft points to the moderate force of the bargaining power of suppliers as an important strategic consideration in the computer technology industry environment.
The effects of substitutes on firms and their industry environment are determined in this aspect of the Five Forces analysis.
This external factor weakens the threat of substitution against the company. In relation, the global adoption of increasingly advanced technologies reduces the availability of substitutes and further weakens the threat of substitution that Microsoft experiences.
While moderate switching costs help facilitate substitution, this external factor is not enough to significantly strengthen substitutes.Thus, using above examples, you can analyse the attractiveness of any industry with the Porter’s five forces analysis model.
Michael Porter’s () famous Five Forces of Competitive Position model provides a very effective way of doing this assessment for any industry, and can be used in the software industry too. This paper does a detailed study of the software industry using Porter’s model and the findings will help new entrepreneurs and existing ones to arrive at the right strategies for being unique and addressing the . Thus, using above examples, you can analyse the attractiveness of any industry with the Porter’s five forces analysis model. Now lets study the model in-depth. The Porter’s five forces analysis model. Transcript of Porters Diamond Framework & Case study of Indian Software Industry Porters Diamond The Porter Diamond is a model that tries to explain the competitive advantage of some nations.
Now lets study the model in-depth. The Porter’s five forces analysis model. Thus, using above examples, you can analyse the attractiveness of any industry with the Porter’s five forces analysis model. Now lets study the model in-depth. The Porter’s five forces analysis model.
2) In a study entitled: “Analysis of automotive industry competition based on Michael Porter's model “by Wafa et al. have proposed analysis of competitive affecting forces on the automotive industry with using five competitive forces.”.
Transcript of Porters Diamond Framework & Case study of Indian Software Industry Porters Diamond The Porter Diamond is a model that tries to explain the competitive advantage of some nations.
Microsoft Corporation’s Five Forces Analysis (Porters) on competition, buyers, suppliers, substitutes & new entry is shown in this software firm case study. Skip to content Panmore Institute. Apple’s Five Forces analysis (Porter’s model) of external factors in the firm’s industry environment points to competitive rivalry or intensity of competition, and the bargaining power of buyers or customers as the most significant factors that should be included in strategic formulation to ensure the continued success of Apple products.