Porter’s Five Force’s Essay Example

Simply stated, strategy is fighting or controlling competition. Most managers do not sleep in the knowledge that a competitor is about to outwit them in their market share. This prompts them to act. Often what they do is that they end up formulating strategies that would help them retain their market share. What characterizes this strategy is what is sometimes referred to as the five forces of Porter. The decisions made revolve around this main five points.
The first force that influences strategy formulation is the entrance of new businesses which might become worthy competitors. Companies have to examine the economics of a given new entrant and find out their prospects before settling down to compete. If the entrant is determined a potential threat, then they need to find a solution by targeting their weakness or acting before they do. Sometimes this seems impossible, a point at which then they have to look at the power of customers and suppliers. Competitiveness also reflects upon the power to convince customers to buy your products amid other offers. By winning a customer’s trust, one can outcompete their competitors. This can be combined with convincing the suppliers by offering the best bargain such that competitors lose value or have to get the same products at a higher price.
In strategy formulation, when the competitors have a product that already has strong market value, strategy formulation changes. To control the competitiveness of such companies, a management board would determine ways of producing a close replica of the same product to run parallel to the established brand. Profits thus generated from the market value can be shared between the two. This leaves room for the initial company to focus on its established brands with a low competition value. These forces are meant to position the company in a defensive position against competitors. They are also meant to act as a guard against changing policies and ideas while anticipating new competition changes.