Please use airlines Over 30 years ago Michael Porter identified a holistic appro

ID: 351127 • Letter: P

Question

Please use airlines

Over 30 years ago Michael Porter identified a holistic approach to understanding how competitive forces shape strategy. He posited that the only way to truly insulate an organization from underlying economic volatility is by understanding the five competitive forces and how they relate, fundamentally, to the organization.

The five forces are:

Rivalry among existing competitors

The bargaining power of suppliers

Threat of new entrants to the market

The bargaining power of buyers

Threat of substitute products/services

Select one of the industries below and identify a specific company in that industry. For that company, identify the key drivers of competition for that industry and specifically for the selected company. Explain how those external competitive forces are affecting the industry and company and how those forces are shaping the overall strategic planning uniquely for that company and generally for that industry. Offer supporting rationale for your explanation and be sure to reference your statements using proper APA formatting. Respond to at least two of your classmates’ posts.

Industry:

Airline

Banking

Healthcare

Retail

Fast Food

Explanation / Answer

Porter’s 5 Force Theory for Fastrack watches

The analysis of Fastrack watches according to Porter’s five force theory is as follows.

THREAT OF NEW ENTRANTS:

Due to Economies of scale, the production cost of Fastrack products is low. Hence, it would be impossible for new entrants to produce watches at such cheap price and standard quality. The consumer loyalty already exists in the market because of Titan brand. Hence, Fastrack being a Titan product also has a loyal consumer base among its targeted audience.

The designs of Fastrack are unique which makes it nearly impossible for other companies to imitate and reproduce. In some segments like helmets and wallets, according to the reviews, the pricing is a bit higher. In segments like bags, the quality of the finished product is below expectations. This will facilitate people to go for new entrants who can produce nearly identical quality of bags, wallets at cheaper prices.

THREAT OF SUBSTITUTES:

Due to the availability of various alternatives within the given range, the threat of substitution always exists. The main competitors for each product of Fastrack are mentioned in the table below.

PRODUCT

COMPETITORS

Watches

Sonata , Timex , Q & Q, Casio , Chinese brands

Wallets

Puma , Adidas , American Tourister , Hidesign

Bags

Baggit , Kanvas Katha , Peperone , Butterflies

Eye Gears

Joe Black , Flying Machine , Allen Solly , UCB

Belts

Puma, Diesel ,Louis Phillip , Winsome Deal

Helmets

Studds, Vega, Local Manufacturers

BARGAINING POWER OF SUPPLIERS :

Fastrack has always tried to maintain its quality and economical price by having a large network of regional suppliers of raw materials. As the suppliers are large in number so they cannot influence the pricing of the Fastback products. In case of watches they just procure the basic raw material and they manufacture and assemble the watches themselves. But for eye gears and bags segment they procure the finished products from local and some Chinese suppliers. As Fastrack is a well-known brand , so most of the suppliers always want to be associated with it and if Fastrack wants to switch suppliers it can easily do because of its brand image and good reputation.

BARGAINING POWER OF CONSUMERS :

Fastrack has always targeted the younger population of our country. By doing so they may have been able to market their products to a large population base but the power but the power of this segment of buyers is formidable. The segment offers little or no loyalty to the sellers and can switch from one brand to another at the slightest provocation. Hence, the buyers dictate the terms of the market. Also, the buyers will shift to another brand as soon as their pocket allows them to, putting more pressure on the sellers.

COMPETITIVE RIVALRY:

A large consumer base means a large number of competitors. By producing a number of goods, Fastrack faces a stiff competition in each of these products. Each product market consists of niche companies which produce that product only as well as the companies which, like Fastrack, produce a number of products. This has resulted in fierce competition in each market segment. Not only does Fastrack competes with the higher end brands which are constantly innovating and evolving, giving consumers better options, but also with the lower end brands which are constantly innovating to reduce the cost of their products. This has made sure that Fastrack provides its customers with the best product options at a reasonable price.