Hey, This is an example question from a past test. Could someone please give me
ID: 369514 • Letter: H
Question
Hey, This is an example question from a past test. Could someone please give me an example of the structure of the written response and what my argument should be (like what points and backing i should talk about from a project management point of view) :)
Written response example
A manufacturing business is considering introducing a new design of solar panel into the Australian market, the technology is around 10% more efficient than existing models but is also slightly more expensive. Describe how the business could use Porters 5 forces model to understand their marketplace, to decide whether they should enter the Austraian market and how they should do so
Explanation / Answer
Porter’s five helps in deciding whether a market is profitable and will remain so in the long run. In the short run, many things can be profitable, but very few can stand the test of time. This market attractiveness is determined not just by the company and the company’s product but also by external factors like economy, politics etc and market-specific factors like consumers, competitors, and suppliers. Porter’s five helps in understanding the market in detail by offering a structured framework for the analysis of the market using market-specific factors.
The five forces are
1. Threat of intense segment rivalry
2. Threat of new entrants
3. Threat of substitute products
4. Threat of buyers' growing bargaining power
5. Threat of suppliers' growing bargaining power
An ideal market is one where the supplier bargaining power is low, the buyers have low bargaining power, the competition is low, buyers do not have other choices as substitutes and the market is difficult for new players to enter.
Describe how the business could use Porters 5 forces model to understand their marketplace, to decide whether they should enter the Australian market and how they should do so
The company should find the market size, growth rate, the revenue, and profit. It should look out for
This will give a fair estimate of the intensity of competition among the players
The threat of new entrants-The Company should look out for exit and entry barriers. If exit barriers are high then the risk is high – so many firms may not enter but once entered they would fight for the pie. E.g. exit barriers- legal rules restricting exit, high fixed costs et. E.g. airline industry has high exit barriers. If entry barriers are high, then very few firms would enter and competition will be usually. Examples of entry barriers include political/ legal reasons/ high investment required/ difficulty in accessing distribution channels. An ideal state would be one with high entry barriers and low exit barriers. Less competition and less risky
Substitutes-The company should check whether buyers have easy access to substitutes. E.g. Hydroelectric power, thermal power etc. If so it would be difficult to convince consumers to switch to solar power and even if they use solar power they can easily migrate to other sources of power
Threat of buyers' growing bargaining power is high when
So the company should understand whether it is possible to differentiate their product and offer at the right price
Threat of suppliers' bargaining power – The company should analyze whether
Supplier power should be low for long-term profitability