Answer to Question #235866 in Management for Feruza

Question

Describe Porter's Five Forces Model using business case example from Uzbekistan.

Answer 1

a). Threats of new entry: Here, one needs to consider how easily others could enter your market and threaten your firm’s position. For instance, economies of scale. 

b). The threat of substitution: There is a need to regulate the likelihood that your customers will replace your product or service with a substitute that solves a similar need. For example, switching costs. c). Bargaining power of suppliers: There is a need to examine how easily suppliers could increase their prices and therefore affect your bottom line. For instance, the uniqueness of each supplier’s product. d). Bargaining power of buyers: Correspondingly, one needs to determine whether buyers have the power to drive your prices down. For example, the number of customers. e). Competitive rivalries: One needs to look at the strength and the number of the current competitors. For instance, quality differences.