Understanding the various competitive forces that affect strategic planning.
Do some research and find an analytical tool that aids in understanding the various competitive forces that affect strategic planning. Although all organizational sectors potentially face similar kinds of competitive forces, each sector and/or organization may face unique factors that affect competitive pressure at any given time, depending on varying circumstances.
For instance, you may investigate “supplier bargaining power from foreign markets” or “dealing with emerging companies in the cell phone (or tech) industry.”
Sample Solution
One analytical tool that can be used to understand the various competitive forces affecting strategic planning is Porter’s Five Forces Model (Wehlau, 2019). This model was developed by Michael Porter in 1979 and enables organizations to analyze their industry by examining five different forces: supplier bargaining power, buyer bargaining power, threat of new entrants, threat of substitute products/services and rivalry within an industry. By assessing these factors, companies are able to anticipate potential threats as well as market opportunities which can help them make informed decisions based on the current market conditions.
For instance, when it comes to supplier bargaining power from foreign markets – say for a tech company – understanding the local laws governing technology imports and exports in other countries is key. The government may impose certain tariffs or restrictions that could put your company at a disadvantage compared to its competitors (Wehlau & O’Rourke, 2018). On the other hand, if you determine that certain suppliers offer lower costs due to weak labor regulations or currency fluctuations then this could be beneficial for you and allow you to remain competitive.
Moreover, understanding how emerging companies in the cell phone industry will affect your organization is also important when using Porter’s Five Forces Model. Examining trends like increased competition from new entrants or greater availability of substitute products can give insight into how these factors may influence pricing dynamics (Wehlau & O’Rourke 2018). Furthermore this analysis can provide information about whether existing firms have advantages over newcomers such as economies of scale or access to resources which in turn helps inform strategic planning decisions related specifically to this sector.
In conclusion, Porter’s Five Forces Model offers an effective way for analyzing external forces that shape industries – including technological advances -and provides insights into how changes in each factor might affect profitability and competitiveness (Wehlau 2019). By helping identify potential threats as well as opportunities it gives organizations valuable information they need for making sound business decisions related specifically with respect to their sector and surroundings.
