BBA 3391
Unit I Essay
Columbia Southern University
BBA 3391 Information Technology Cost Analysis
Unit I Essay
Here at GrandTech, our mission is to bring the best personal computing products and
support to students, educators, designers, scientists, engineers, businesspersons, and consumers
around the world. With great pride, GrandTech is proud to follow Porter’s five forces model
which is another key contributor to our success. The five forces model is described as “a model
for analyzing the competitive forces within the environment in which a company operates, to
assess the potential for profitability in an industry” (Baltzan, 2020). The five forces associated
with this model are buyer power, supplier power, threat of substitute products or services, threat
of new entrants, and rivalry among existing competitors. Understanding this model and how it
directly impacts our company is vital to our success.
Buyer power is the first facet of Porter’s model that impacts our profitability. In short,
buyer power is when consumers can affect the price they pay for an item. It is always in the best
interest of the GrandTech’s finance department to monitor these trends and create combative
measures to keep buyer power low. Two effective methods this is achieved is through switching
costs which makes customers reluctant to switch a product or service, and loyalty programs that
reward customers based on their spending. The second force Porter’s model describes is supplier
power. This ‘measures the suppliers’ ability to influence the prices they charge for supplies
(including materials, labor, and services)” (Baltzan, 2020). When and if process for materials
used in our products rises, we too must rise our products’ pricing when distributing to the
Unit I Essay
Columbia Southern University
BBA 3391 Information Technology Cost Analysis
Unit I Essay
Here at GrandTech, our mission is to bring the best personal computing products and
support to students, educators, designers, scientists, engineers, businesspersons, and consumers
around the world. With great pride, GrandTech is proud to follow Porter’s five forces model
which is another key contributor to our success. The five forces model is described as “a model
for analyzing the competitive forces within the environment in which a company operates, to
assess the potential for profitability in an industry” (Baltzan, 2020). The five forces associated
with this model are buyer power, supplier power, threat of substitute products or services, threat
of new entrants, and rivalry among existing competitors. Understanding this model and how it
directly impacts our company is vital to our success.
Buyer power is the first facet of Porter’s model that impacts our profitability. In short,
buyer power is when consumers can affect the price they pay for an item. It is always in the best
interest of the GrandTech’s finance department to monitor these trends and create combative
measures to keep buyer power low. Two effective methods this is achieved is through switching
costs which makes customers reluctant to switch a product or service, and loyalty programs that
reward customers based on their spending. The second force Porter’s model describes is supplier
power. This ‘measures the suppliers’ ability to influence the prices they charge for supplies
(including materials, labor, and services)” (Baltzan, 2020). When and if process for materials
used in our products rises, we too must rise our products’ pricing when distributing to the
