How industry influences strategy choice
Posted: Wed Feb 12, 2025 8:18 am
The choice of a particular strategy to combat competitors will depend on the characteristics and attractiveness of your industry in terms of generating profits in the long term. The more profitable the niche, the more comfortable the management and business will feel. However, not all industries have equal opportunities, tools and conditions.
There are obstacles in the markets that prevent companies and their partners bolivia phone number list from developing quickly and without problems. Porter found that there are 5 "competitive forces" in each industry. These are factors that have a significant impact on the company. Because of this, management changes.
1) Buyer power. Buyers' influence on the market is determined by their ability to dictate their terms: to reduce prices, demand improvements, changes in product quality. If buyers have high market power, the company's opportunities will be reduced and it will be forced to reduce prices. Otherwise, demand and sales volume will decrease.
2) Supplier power. Suppliers can have a significant impact on the cost of raw materials and supplies. If a supplier is influential, then in such situations companies will have to adapt their strategy to reduce their dependence on them. Otherwise, the company's production costs will increase.
There are obstacles in the markets that prevent companies and their partners bolivia phone number list from developing quickly and without problems. Porter found that there are 5 "competitive forces" in each industry. These are factors that have a significant impact on the company. Because of this, management changes.
1) Buyer power. Buyers' influence on the market is determined by their ability to dictate their terms: to reduce prices, demand improvements, changes in product quality. If buyers have high market power, the company's opportunities will be reduced and it will be forced to reduce prices. Otherwise, demand and sales volume will decrease.
2) Supplier power. Suppliers can have a significant impact on the cost of raw materials and supplies. If a supplier is influential, then in such situations companies will have to adapt their strategy to reduce their dependence on them. Otherwise, the company's production costs will increase.