MIDTERM EXAM The City University of New York Anaceli Paredez 20th March 2020 A company can create a competitive advantage by including the porter five forces. The Porter five forces are an es ...

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MIDTERM EXAM
The City University of New York
Anaceli Paredez
20th March 2020
A company can create a competitive advantage by including the porter five forces. The Porter five forces are an essential collection of resources that firms are keen at using based on the potential market gap that they are capable of creating within their industry. The five forces were primarily made to be used in the analysis of an industry before a company can take any action. Application of the resources in a company plays an integral role in the elevation of the companies’ position within their industry. The resources used by companies to be able to elevate their position in their industry comprise of; industrial rivalry, bargaining power, the threat of substitutes, supplier bargaining power as well as forces of new entrants into the industry. The usage of the major forces plays an instrumental role in the creation of a perfect position for a firm within the industry since it helps in the creation of competitive advantage(Hatten,2018). Hence, it is essential to include resources as part of the strategy.
Industrial rivalry
The position of any given company within an industry is affected by the number of competitors who operate in the same industry. There are several factors which are brought up by the competitors in the creation of threats; the factor includes; provision of high-quality products, lower pricing strategy as well as provision of offers. Those are some of the few factors which tend to affect the various ways through which a company operates within the competitive industrial domain. Increase in the number of competitors plays an integral role in ensuring that the industry becomes more robust, and this usually affects the company's position in the industry. This trend is generally witnessed as the increase in the number of competitors affects the power of the company while on the other hand decrease in the number of competitors results to a creation of more power for the company. It is essential to carry out an analysis of the industrial rivalry because it plays an instrumental role in the creation of strategic paths that companies are supposed to follow to be able to create an absolute competitive advantage over the other competitors which are in the same industry.
The threat from new entrants
New entrants pose a significant threat, and this is a matter of concern for companies. This is an essential strategic resource which usually affects the company's position within an industry. The issue of threat from new entrants is related to the company's position within the market as well as the initial investment costs, which is involved in the whole process. If the value of is investments is high, then the market is likely to have a limited number of entrants. If the investment cost is lower, then the number of entrants in the industry will automatically reduce.
The power of the suppliers
The power of the suppliers is a major issue that i