Write 400-600 words that respond to the following questions with your thoughts, ideas, and comments. Be substantive and clear, and use examples to reinforce your ideas.
You have been called in by your boss. The company is considering buying another smaller firm; however, some business analysis is needed for your company management to make its final decision about purchasing. Your boss has asked you to look at the firm that he or she is considering to buy in terms of competitive advantage. You have been asked to explain to senior management how you would provide this information. You have been tasked with using Porter’s five forces to make this determination. Discuss and defend to your management how utilizing Porter’s five forces to analyze any organization or industry would provide an understanding of competitive advantage.
Qualitative Evaluation of the Industry’s Strategic Position
Choose an aspect of the information technology (IT) industry, use Porter’s five forces to make a qualitative evaluation of the industry’s strategic position. Be sure to explain each of the five forces as well as explain how they relate to your chosen industry.
Note: The mobile phone industry was provided as an example in the video material and may not be used as the subject for this assignment.
Remember to include the following elements (Porter’s five forces):
Threat of new entrants: Are new entrants being attracted to the market, and are there barriers to entry in the industry?
Threat of substitute products or services: Are there other products that could be alternatives to offerings in the chosen industry?
Bargaining power of customers: What degree of bargaining power do the buyers have in terms of putting the industry under pressure to provide more products or less cost?
Bargaining power of suppliers: What is the importance of raw materials, components, labor, and services that are required for the industry, and are there substitutes for those inputs? Discuss the possibility of switching suppliers, if necessary.
Intensity of competitive rivalry: Does the industry have a sustainable competitive advantage?