Ten Organizational Design Models to align structure and operations to busines...
Porters forces at play
1. It is designed to explain the relationship
between the five dynamic forces that affect
an industry’s performance; these are the:
• intensity of competitive rivalry
• threat from new entrants
• threat from substitutes
• bargaining power of buyers
• bargaining power of suppliers
and looks like this…….
2.
3. What Determines Rivalry?
• Projected industry growth (fight for market share)
• Fixed costs expectations (projected on forecasts)
• Brand identity
• Numerous competitors with equal power and
resources
• Lack of differentiation
4. What Determines Threat of Entry?
• Economy of scale
• Brand identities, marketability
• Capital requirements (raw materials, technology)
• Access to distribution
• Absolute cost advantages
• Government policies, legislation
5. What Determines Supplier
Power?
• Supplier concentration, density
• Switching costs, effort
• Forward integration threats
• Presence of substitute inputs
(plus projected)
• Importance of volume to suppliers