CIS 500 Midterm
Heather Plum
10-29-2007
1) Explain Porter’s 5 forces. Give Examples.
The Five Forces Model helps determine the relative attractiveness of an industry and includes: Buyer Power, Supplier Power, and Threat of substitute products or services, Treat of new entrants, and Rivalry among existing competitors.
Buyer Power in the Five Forces Model is high when buyers have many choices of whom to buy from and low when their choices are few. To reduce buyer power an organization must make it more attractive for customer to buy from it instead of its competition. An example of way that a company can reduce the power of a buyer is through Loyalty Programs.
Supplier Power in the Five Forces Model is high when buyers have few choices of whom to buy from and low when their choices are many. Supplier power is the converse of buyer power: A supplier organization in a market will want buyer power to be low.
The Threat of......
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