Solved: Please explain Porter’s Five-Forces model of industry competition and explain the model’s

Please explain Porter’s Five-Forces model of industry competition and explain the model’s importance in the concept of strategic grouping within industries. Please do not give the text book meaning. Explain in simplest terms.

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Porters five forces model is the analysis of competition within an industry.its also focus on developing strategic.

It also tells about bargaing power of buyer and suppliers and attractiveness of new entrants in the markets.

It has five forces which are as follows:

1. Threats of new entrants in the industry : if the markets is profitable than more and more people attracted to work into this industry. As more people are there so competition is high.

2. Threats of substitutes : if any products has many substitutes than people can change from one product to another product which has same features so it will give more competition.

3. Bargaining power of supplier: if there are less substitute of raw material than suppliers also can put firm in pressure and they can sell on more price.

4. Bargaining power of buyer: it is the ability of buyer or customer to put firm under pressure.

5. Industry rivalry:it is the major factor to determine the competition inside the industry.

People can define strategies according to the level of competition. There are many things which are as follows:

1. Product features

2. Pricing strategies

3. Availability of products

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