Porter’s five forces Analysis
Porter’s five forces include competitive rivalry, threat of new entry, buyer power, threat of substitution, and supplier power. The competitive rivalry should check on the number of competitors, do they have a solid competitive plan in place, does the competitors have more competitive merit, and the diverse in quality(Gilbert, 2015). In the threat of novel entrants section, they should check on the entry barriers, loyalty of the clients, and the government policies in place to either encourage or discourage new entrants.
Also, the analysis should check on the threat of substitution of the company’s products.The client may choose to substitute the product and services for that of another company. The company with fewer substitutes has less to worry compared to the company with less substitutes. In the analysis, the company should examine how many substitutes that exist, the perceived level of differentiation, cost that the buyer may incur to switch and the easiness of the buyer switching to a substitute.
The power of the supplier should also feature in the analysis of the Porter’s five forces. The suppliers include those who provide the company with raw materials, physical staff labor, and knowledge support. The supplier power answers questions such as the number and the size of the suppliers available, the cost that the company and competitors would use to switch the suppliers, and the strength of the supply channel.
The power of the buyers is also critical in the analysis. If the buyers have choices for products they can have high bargaining power. The analysis should check on the number of buyers and how sensitive are the buyers in terms of prices, the information available to the buyers about the products, and the different between the company and the clients.
Boston Consulting Group
The second business analysis technique is referred to as the Boston Consulting Group (BCG). It is designed to enable the aid the firm in considering growth opportunities by reviewing their assortment of the products so as to decide where to make investments or develop their produce.
The company should use this method to group the analysis into a graph that indicates the growth rates and market shares(Hill, Jones,& Schilling, 2014). The graph will contain four categories namely cash cows, dogs, question marks, and stars.The cash cows is when a firm has a high market share but in a slow growing industry. The dog is where there is low market share in a mature and an industry that is experiencing slow growth.The question marks include businesses that operate with market share that is low and in market that is experiencing high growth. Lastly, there is the category named as the stars where there is high market share in an industry that is fast-growing. For different categories, the company should come up with a strategy so as to remain profitable.
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