Porter Five Forces Model

Running head: PORTER’S FIVE FORCES ANALYSIS 1




Porter’s Five Forces Analysis

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, PORTER’S FIVE FORCES ANALYSIS 2


Porter’s Five Forces Analysis

Introduction

The Porter’s Five Forces model is a very useful strategy for determining where strength

of a company is vested. The model is vital since it assist a company in identifying the strengths

and the weaknesses of the company, including the competitive factors and new business

opportunities. Understanding the strengths and weaknesses within a company gives an advantage

of knowing what the major advantages and disadvantages are for your company. It also helps

you avoid making bad decisions that could affect the company’s performance by understanding

what the consequences of your decisions might be. I researched about Cochlear Company and

investigated the applications and implications of the model on the company. The model is a very

important tool that can be used in the planning and creation of a strategy for a new company to

enter the market or for a company to introduce/rebrand a product in the market. The Model, as its

name indicates, is mainly constituted by five elements that help the companies have a better

understanding of the industries and the risks that they are getting into. The elements include

intensity of rivalry among competitors, the threat of potential entry, the bargaining power of

suppliers, the bargaining power of buyers, and the threat of substitutes.

Figure 1: Porter's Five Forces