Case Study : Business Strategy For The Bicycle Industry And Adventureworks Cycle Company

Porter has identified five (5) competitive forces that shape every industry and every market. The forces determine the intensity of competition and hence the profitability and attractiveness of an industry. Based on the information derived from this analysis, management can decide how to influence or to exploit particular characteristics of this industry.

Supplier bargaining power – a strong force may be supplier bargaining power. A company that leases the land where it draws its supply from may decide to up the lease price. A water company may also decide to raise its rates and therefore cause a company to raise its prices. Supplier bargaining power may be quite strong due to the fact

Supplier’s bargaining power: Most of the motorcycle suppliers depend on a single or two makers to purchase most of their products. This can cause great loss to a supplier if a buyer decides to switch to another supplier. This leads o the suppliers being too susceptible to demands hence they hold little authority.

Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.

The competition has been analyzed by using Porter’s Five Forces Model. By gathering an analysis of the threats that can come from competitive rivalry, potential new entrants, bargaining power of buyers, bargaining power of suppliers, and substitutes, Company G can be better compared to its competitors.

Porters Five Forces model evaluated Actual competition, Threat of new entrants, Threat of Substitute Products, Bargaining Power of Suppliers, and Bargaining Power of Customers. Actual Competition in the Luxury Recreational Vehicle industry is mixed due to low switching costs, constant growth, and high differentiation among products in the industry. Threat of New entrants in

The five forces examines the dynamics within an industry. Understanding the competitive forces, and their underlying causes, reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition and profitability over time. Understanding the structure of its industry is also essential to effective strategic positioning.

Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.

In using Porter’s five-force analysis, we can discover how strong the competitive forces are within the sports apparel and footwear industry. The five-force analysis involves; rival sellers, threat of new entrants, substitute products, supplier bargaining power and buyer bargaining power, which we will explore to determine the attractiveness and intensity of competition within this market.

Porter’s Five Forces is defined as threats of new entrants, bargaining power of suppliers, power of buyers, the threat of substitutes and rivalry among existing competitors. New entrants into the industry aim to gain market share from rivals, so the intensity of competition may require to make changes on current strategy of marketing to maintain existing market share. The bargaining

Bargaining power of suppliers: This force analyzes how much power a business 's supplier has and how much control it has over the potential to raise its prices, which, in

Defining an industry can be described as drawing a line between the established competitor and the substitute products offered by competitors outside the industry (Porter 1998). “Porter’s five forces provide a framework for an industry and business strategy development to drive the five forces that determine the competitive intensity and attractiveness of a market. The Porter’s Five Forces model helps identify where improvement can be made regarding competitive forces, threat of potential entrants, bargaining power of buyers, and bargaining power of suppliers and threats of substitute products.

This allows the level of buyer’s power to be medium. However, the bargaining power of supplier is also medium because there are few suppliers in the aerospace industry, enabling the companies to find a product price that achieves profit maximization. On the basis

Bargaining power of suppliers: A boutique and diverse company holds bargaining power. GAME has the opportunity to build portenial mega stars and partner with these larger competitors.

The five forces analysis helps in identifying and determining the attractiveness of an industry, the source of competition. And because Porter's five forces reveal insights on profitability, it can inform important decision decisions about whether to leave or enter industries or sectors. Moreover, the model can be used to compare the impact of competitive forces on the own organization with their impact on competitors. Competitors may have different options to react to changes in competitive forces from their different resources and competences (Pearce and Robinson, P.92). This may influence the structure of the whole industry.