These are projects posted by the students of Dr. Gove Allen at Brigham Young University. These students have taken one semester-long course on VBA and generally have had no prior programming experience

Friday, January 20, 2012

Strategy: Porter's 5 Forces

Porter's five forces is a framework for industry analysis and business strategy development. These five forces effect the company's ability to serve it's customer and make profit. Lets analyze Ford Motor Company according to Porter's Five Forces.

1. Threat of New Competition: The treat of new competition is very high for Ford. With companies like Hyundai and Kia, which are gaining extensive market share, we can say that there is major threat for Ford to lose market share to these new companies which are trying establish their root in the American Auto Industry. Since both the scale of economy and Scope economy are high for the Auto Industry, the treat for new competition is imminent for company like Ford.

2. Threat of Substitute Products: The treat for substitute is low but it still exist. With the cost of gas increasing and the economy not function very well, people have cut down their spending in long term investments like automobiles. They have gone to other alternatives like public transportation.

3. Bargaining Power of Customers: Although the Automobile Industry is huge and there are huge number of buyers, due to the availability of alternatives and the current economic downturn, the Bargaining power of customers have gone up. The customers are looking for more affordable and reliable automobiles, and they have huge number of alternatives to choose from.

4. Bargaining Power of Suppliers: The bargaining power of suppliers is very low for Ford. Ford controls all its suppliers and have made special arrangement and commitments with its suppliers that favors its operation and helps cut cost for ford.

5.Intensity of Competitive Rivalry: The Intensity for Competitive Rivalry is very high for Ford. With other automobiles companies trying to boost their sales and new companies entering the market, there is intense rivalry. Although there are huge start up cost associated with new companies, but the companies trying to penetrate the market are already well established in other countries. The switching cost and exit cost associated with the automobile industry are very high which makes the rivalry even more tough.

2 comments:

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