Competitive Forces Models For Strategic Formulation

It's my trust that you are all doing great.
Today I want to share with you on the Competitive Forces Models which are very important in formulating Strategy.

 

When a business needs to catch an opportunity, competitive forces models act as the most important aspect.
Michael E Porter introduced  well known five forces models, these forces have been very useful to managers in business world especially in positioning themselves in a competitive environments.

The Competitive Forces Models include:

1. Risk of entry by potential competitors.
2. The intensity of rivalry among established companies within an industry. 
3. The bargaining power of buyers
4. The bargaining power of suppliers
5. The closeness of substitute to an industry products.

 
As each force becomes stronger, it always limit a company to generate super profit, hence acts as a threat to the prosperity and growth of the company.
On other hand, when the forces become weaker, helps a company to generate greater profit hence act as an opportunity to the company growth and prosperity.

When managers formulate their strategic plans for company, they should put into consideration all these forces to ensure those strategies come with great effect in their business.

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