Business and Entity Valuation

Running head: BUSINESS AND ENTITY VALUATION
Business and Entity Valuation
University Name
Student Name
Authors’ Note

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BUSINESS AND ENTITY VALUATION
Fairfax Media Limited
Step 1:
Conduction of business strategy analysis of Fairfax Media Limited using five forces
model
Five forces analysis can help in shaping business strategy of the firm Fairfax Media Limited
utilizing five forces. Porters’ Five Forces include the following:
-Threat of New Entrants
-Bargaining Power of Suppliers
-Bargaining Power of Purchasers
-Threat from Substitutes Products (Reilly and Schweihs 2016)
-Rivalry among subsisting products
Figure: Porter’s Five Forces Framework
(Source: Reilly and Schweihs 2016)

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BUSINESS AND ENTITY VALUATION
Analysis of Fairfax Media limited using Five Forces
Threats of New Entrants:
The new entrants in particularly media industry bring innovation and new ways of
undertaking things and exert pressure on Fairfax Media Industry. This is carried out by means
of low pricing strategy, decreasing costs, and delivering new value propositions to the
consumers. Essentially, Fair fax media limited has the need to handle these challenges as well
as develop effective barriers to shield competitive edge of the corporation. Fairfax Media
Industry can design various new products as well as services and bring new customers to
purchase Fairfax Media Limited. Management of the firm can build economies of scale to
decrease fixed cost for every unit and develop capacities by allocating funds on research as
well as development (Reilly and Schweihs 2016). New rivals are less probable to enter a
vibrant industry where the established players namely Fairfax Media Limited namely
illustrating the standards on a regular basis. The impact of the new entrants is said to be low.
Bargaining Power of Suppliers:
Majority of the corporations in the media industry purchase their raw material from various
suppliers. Suppliers in different dominant position can decrease overall margins that the firm
Fairfax Media Limited can earn in this specific market. Fundamentally, powerful suppliers
present in the media segment utilize their negotiating power in order to extract superior prices
from the corporations operating in the media segment (Reilly and Schweihs 2016). The
impact of the bargaining power of suppliers is said to be moderate.
Bargaining Power of Buyers:
Buyers intend to purchase offerings that are available by particularly disbursing the minimum
price as achievable (Reilly and Schweihs 2016). As such, this exerts pressure on profitability