The five forces model is one of the most widely used tools in strategy. Michael Porter wrote his original work on the subject over 30 years ago. However, he updated this work in 2008 and you will watch the video listed in the resources section for more details on the updated model. Evaluate the strength of each of Porter’s five forces within three industries.
- Use the following chart to organize your evaluation to analyze three industries: coffee shops, big-box hardware stores, and automobiles. For each industry, evaluate the strength of each of Porter’s five forces, as well as complements, by filling in a chart for each. Articulate why you feel a particular force is high, medium, or low and why. Refer to Exhibit 3.4, The Five Forces Competitive Analysis Checklist on page 88, to guide your analysis of whether a force is high.
Industry Forces: Coffee, big-box hardware stores, and automobiles.
High? Medium? Low?
Threat of new entrants
Power of buyers
Power of suppliers
Power of substitutes
Rivalry among competitors
- Navigate to the threaded discussion below, submit your completed chart and answer the following questions:
- After your overall assessment of the three industries, which one is the most profitable and which one is the least profitable? Explain your rationale for the ranking. Defend your answer with a comprehensive evaluation that demonstrates clear, insightful critical thinking.
- Has this ranking changed over time? How? For each industry, which forces do you expect to change in the future? Explain why. Defend your answer with a comprehensive evaluation that demonstrates clear, insightful critical thinking.