Complete A Porter’s Analysis To Industry Analysis On An ✓ Solved
Complete a Porter’s Analysis to Industry Analysis on an
Complete a Porter’s Analysis to Industry Analysis on an Improved Business Industry (not the airline industry) using the six forces. Indicate each force’s competitiveness intensity by signifying Low-Medium-High, or a combination of two grades. Support your evaluation on each force’s competitiveness position in the industry.
Discuss five trends in the external environment scanning process that will affect most businesses.
Create a Strategic Group Map of industry (but not the airline industry) using two broad characteristics- price and product-line. Use at least eight firms in this analysis.
Create an Industry Matrix featuring your Strategic Audit firm and two competitors. Use five Key Success Factors, one of which should be low cost. Use the table found in Chapter Four for this assignment.
Paper For Above Instructions
The analysis of industries and their environments is essential for organizations aiming to navigate the complexities of the modern business landscape. Porter’s Five Forces Framework is a pivotal tool for assessing the competitive intensity within a given industry. In this paper, we will conduct a Porter’s analysis on the consumer electronics industry, followed by discussions on external environment trends that influence businesses, a strategic group map, and an industry matrix focusing on key success factors.
Porter’s Five Forces Analysis of the Consumer Electronics Industry
1. Threat of New Entrants: The consumer electronics industry presents a medium to high threat of new entrants. While significant capital is required to establish manufacturing and distribution channels, technological advancements and online retailing have lowered entry barriers. New entrants can disrupt established firms through innovation or niche marketing strategies. However, economies of scale enjoyed by incumbents may pose a challenge for newcomers attempting to compete on price (Porter, 2008).
2. Bargaining Power of Suppliers: This force in the consumer electronics industry is classified as medium. Many parts and materials can be sourced from multiple suppliers, which lowers supplier power. However, for specialized components like chipsets, certain suppliers can exert substantial influence. In cases where technology is proprietary, suppliers may have higher bargaining power (Grant, 2016).
3. Bargaining Power of Buyers: The bargaining power of buyers is high in the consumer electronics industry. With numerous brands offering similar products, customers can easily switch based on price and features. Additionally, the widespread availability of information through online reviews and forums enhances consumer awareness, further increasing their power (Kotler & Keller, 2016).
4. Threat of Substitute Products or Services: The threat of substitutes is also assessed as high. Consumers may opt for alternative technologies, such as tablets instead of laptops, or streaming services instead of physical media. The rapid pace of innovation in electronics creates constant substitutes, compelling firms to enhance their product offerings regularly (Porter, 1998).
5. Rivalry Among Existing Competitors: The rivalry within the consumer electronics industry is very high. Many well-established companies compete for market share, leading to fierce competition in terms of pricing, product features, and technology. The presence of major players such as Apple, Samsung, and Sony intensifies conflict and drives continuous innovation (Hitt, Ireland, & Hoskisson, 2013).
In summary, the competitive landscape of the consumer electronics industry is shaped by high buyer power, significant threats from substitutes, and intense rivalry, while supplier power remains moderate, and the threat of new entrants is somewhat high.
Trends in External Environment Scanning
Several external trends significantly impact business strategies across industries:
- Technological Advancements: Rapid advancements in technology lead to shifts in consumer expectations, necessitating firms to innovate continuously or risk obsolescence.
- Sustainability and Environmental Awareness: Growing consumer demand for eco-friendly products forces businesses to rethink supply chains and product designs to incorporate sustainable practices.
- Globalization: As markets become more interlinked, businesses must navigate international regulations, cultural differences, and global competition.
- Regulatory Changes: Ongoing changes in regulations affect operational viability and practices, necessitating proactive compliance measures from businesses.
- Changing Consumer Preferences: Consumer behaviors continue to evolve, with a preference for personalized experiences and digital interactions, impacting marketing strategies (Kotler, 2020).
Strategic Group Map of the Consumer Electronics Industry
A strategic group map visually represents the positioning of key players in the consumer electronics industry based on two strategic characteristics: price and product-line breadth. For example, using the y-axis for price (low to high) and the x-axis for product-line breadth (narrow to wide), we can position major companies such as:
- Apple (High Price, Wide Product-Line)
- Samsung (Medium Price, Wide Product-Line)
- LG (Medium Price, Medium Product-Line)
- Xiaomi (Low Price, Wide Product-Line)
- Sony (High Price, Narrow Product-Line)
- Lenovo (Medium Price, Wide Product-Line)
- HP (Medium Price, Medium Product-Line)
- Dell (Medium Price, Narrow Product-Line)
This strategic mapping illustrates the competitive positioning of these firms and can highlight areas with opportunities or threats based on market dynamics.
Industry Matrix Featuring Key Success Factors
An industry matrix facilitates the assessment of key success factors for a strategic audit firm and its competitors. The following key success factors are utilized in analyzing Amazon, Apple, and Samsung:
| Key Success Factors | Amazon | Apple | Samsung |
|---|---|---|---|
| Low Cost | High | Medium | Medium |
| Product Innovation | Medium | High | High |
| Brand Loyalty | Medium | High | Medium |
| Market Adaptability | High | Medium | High |
| Customer Service | Medium | High | Medium |
In conclusion, using Porter’s analysis, discussing external trends, mapping strategic groups, and utilizing an industry matrix contributes to a comprehensive understanding of the consumer electronics industry's competitive landscape. By examining these aspects, businesses can devise effective strategies to navigate their operational environments.
References
- Grant, R. M. (2016). Contemporary Strategy Analysis. Wiley.
- Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic Management: Competitiveness and Globalization. Cengage Learning.
- Kaplan, R. S., & Norton, D. P. (2001). The Strategy-Focused Organization. Harvard Business Review Press.
- Kotler, P. (2020). Marketing Management. Pearson.
- Kotler, P., & Keller, K. L. (2016). Marketing Management. Pearson.
- Porter, M. E. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.
- Porter, M. E. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business Review.
- Robson, C. (2011). Real World Research. Wiley.
- Thompson, A. A., & Strickland, A. J. (2003). Strategic Management: Concepts and Cases. McGraw-Hill.
- Wheelen, T. L., & Hunger, J. D. (2012). Strategic Management and Business Policy: Toward Global Sustainability. Pearson.