PORTER'S COMPETITIVE FORCES MODEL

Porter's Competitive Forces Model

Porter's Competitive Forces ModelIntroduction

The competitive environment, in which enterprises operate in the various economic sectors, requires management to make decisions regarding truthful implementing strategies that give it a competitive edge. Given this reality, companies today face the need to efficiently manage the set of technological, human, financial, commercial and available for market positioning.

Information technology (IT) as a technological resource, play an extremely important role in business operations, can be regarded as a decisive action to respond to the competitive business world, achieving objectives, maintain good relations with suppliers and ensure satisfaction of customer needs.

Companies can enhance or erode its position in its industry through its choice of strategies, which is why it is considered necessary to establish competitive strategies using information system that they made and that in turn give value to business processes (Chen, H., Copenhagen Business School. CBS., & Danmark, 2010). Companies developed strategies through Porter's Five Forces model to occupy a competitive position in the industry and make the forces mentioned above; these generic competitive strategies are known as: cost leadership, differentiation and focus or concentration.

Overview of competitive strategy

"Father of competitive strategy, Michael Porter, his book in many business school students, university professors, and the company's chief executive officer, and even national leaders bookshelf; competition and strategic theory has been or is being depth study of most of the world's countries and enterprises; classified as official, it is important to discuss issues of his academic achievements by economic conference in the United States and many worldwide economic Academic Forum. If someone can put management theory into a venerable academic principles, as the British “Economist "magazine on his evaluation: This man is Michael Porter.

The corporate strategy is a system of strategy. This strategic system, development strategy, competitive strategy, technology development strategy, marketing strategy, information technology strategy, human resources strategy, there are other strategies. Competitive strategy is equivalent to the corporate strategy; competitive strategy is just part of the business strategy.

How Porter's five forces model help companies in development of strategies by using information system can be can be understood from the following five aspects: five forces model, the three strategies, the value chain, the diamond system, industrial clusters.

Five Forces Model

Michael Porter's main contribution to management theory, between the Industrial Economics and Management has set up a bridge. In his classic book "Competitive Strategy", he proposed industry structure analysis model, namely the "five forces model" that the main factor for deciding profitability is industry attractiveness, corporate competitive strategy in drawing must better understand the decision of the competition rules of the industry attractive. Competition rules to specific analysis: the industry's current state of competition, the bargaining power of customers, the bargaining power of suppliers, threat of new entrants to the five competitive, and the threat of substitute products or services (Pringle, H., Field, P., 2008). These five competitive drivers, to find out the profitability of the company, and should be pointed out that the core of the company's strategy is to decide the right ...