BUSINESS STRATEGY Essay Example | Topics and Well Written Essays - 1000 words

BUSINESS STRATEGY - Essay ExampleThe SWOT analysis indicates how the soused can use these forces for sustainable war-ridden advantage. The five forces are the entry of competitors, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and rivalry amongst the current players in the field.New entrants have to consider establishment rules and regulations, although most of the times they enjoy certain benefits like tax holiday for a specified fulfilment. The SWOT analysis of these five forces help them to identify the uppercase investment and the whether the costs would justify the right amount of turnover. Brand extension strategy keeps the commercialiseing costs low and the chances of success are high. Vodaf matchless, the UK based unstable phone company decided to enter the US market, they made a very strategic move. To keep the market penetration cost low, they acquired the US firm AirTouch at an investment of 112bn. They had studied the bargaining powers of the buyers. Acquisition of an existing firm immediately gave them all the customers without having to make a fresh start. The market penetration period reduces and prevents in the number of competitors in the market. Entry barriers like government licenses are also overcome.While these five forces help in studying the competition, buyers, suppliers and the general market trend, it has limitations. Porters five forces model does not indicate whether an industry could be attractive because certain companies are in it. Besides, the environment changes very apace and it may not be possible to change the strategy as fast by using the five forces model. Most importantly, by using this model, one may concentrate on an existing market but a new market may have better prospects.The Value Chain model of Michael Porter is a model that helps to analyze specific activities through which firms can create value and