The Five Competitive Forces (SMUnit 2 of 1-4)

The Five Competitive Forces
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The application of five competitive forces introduced by Michael Porter, are among the renowned methods that managers apply when making strategic decisions. Michael Porter outlined five competitive forces likely to make fundamental opportunities as well as threats for organizations (Porter, 2008). It is important to analyze the five competitive forces and have a personal opinion on the most suited force for computer industry.
Porter states that the character of competition within an industry is embodied in the five forces, which are important in formulation of strategy. One of the forces include the risk of entry through possible competitors, who refer to companies that are not in competition at the present time within the industry, even though they possess the potential of doing so if an option is provided. The new players’ entry enhances the capacity of the industry and starts a competition for the market share as well as lowering the present costs. The rivalry amongst present competitors can also affect firms a great deal as it involves aggressive struggle for market share. This is because it can pose a great threat to established firms that may engage in extreme rivalry. The ...