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Business Environment and Strategic Management

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Added on  2021-04-16

Business Environment and Strategic Management

   Added on 2021-04-16

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Running Head: Business environment and strategic management Business environment and strategicmanagementEssay
Business Environment and Strategic Management_1
Business environment and strategic management1IntroductionThe way of doing business and the scale of companies in different industry is continuously changing, and at the same time; we can observe that the business environment isalso changing faster than even before. The business environment includes two main forces, external and internal. The external forces can have great influence on business and uncertain for the market. While internal forces are within the command of industry. In such case it is essential to analyse these environmental factors thus the business organization compete with other competitors. Porter’s model is considered as an important tool to analyse the business environment that shows the five forces that affect the competitive environment of a business organization, which affects profitability. Porter’s five forces modelPorter’s competitive model focuses on 5 specific elements that help to understand, whether or not a business can be profitable or sustainable, on the basis of other business existed in the industry(Hubbard, Rice, & Galvin, 2015). A healthy and well organized industry structure should be as much as important to strategist as their company’s own position (Martin, 2017). The five fundamental competitive forces of porter’s model are as follows: (1) buyer’s negotiating power (2) negotiating power of supplier (3) threats of substitute (4) entry of new competitors (5) competition among the existing players. Porter’s competitive model is so useful and often used business strategy technique which is more reliable and realistic alternative to the widely used SWOT analysis (Huggings & Ijushi, 2011).
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