The Concept of Business Strategy Essay Example | Topics and Well Written Essays - 750 words

The Concept of Business Strategy - Essay Example The arrangement of the five forces varies across different industries. For instance, in the commercial airline industry, stiff competition exists between Boeing and Airbus, the power of suppliers, threat of entry and the threat of substitutes are weak while the power of suppliers is strong. In the movie theatre sector, the increase of entertainment and the influence of distributors and movie producers and inputs are significant. The first component in the tool refers to supplier power and refers to the ease of suppliers to lead to changes in prices. This is influenced by the number of suppliers in at each point of production, the cost of switching between suppliers, the power they have over companies and the uniqueness of the product or service. The less the supplier options that are present in an industry, the more power the consumers have. The second aspect of the Porter Five-tool is buyer power and it relates to how easy it is for consumers to lead to a reduction in prices. This i s influenced by the number of buyers, the cost of their decision to switch to other products and services and the value of each customer to the organization. Companies that deal with a relative number of powerful buyers, they have a huge impact on them.The third aspect is competitive rivalry and this relates to the number and ability of the competitors. If a company has a high number of competitors that offer better products and services then, the company has minimal power over the situation.