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MGMT510 Competitive Forces

   

Added on  2020-03-23

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Running head: MGMT 5101Porter’s Competitive ForcesName:Institution:
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MGMT 5102This paper explores the porter’s competitive forces which aim to determine the weaknesses and strengths of every industry. Additionally, the porter’s competitive forces determine the profitability as well as the competition of every industry since they are interdependent. Briefly, the Porter’s five competitive forces are threat of entry which investigatesthe level of challenges experienced by competitors when venturing in the marketplace. The second force involves competition within the industry, which determines the number of products and competitors offered. There is a presumption that the higher the competitor opportunities being a threat to the suppliers and buyers, the more the industries seek better deals (E. Dobbs, 2014). The power of the suppliers is a force which is based on the over-dependence of customersto the providers in the case where vendors are few. In such a case, the providers attempt to exercise more power within the industry. The power of customers is a force which is considered in the case where the customers are few, and the buyers are vital to the institution; hence the customers hold more power making it easier to pull the prices down. Finally, the power of business weakens in the case when the buyers purchase the substitute goods and services offered by the competitors.The porter’s competitive forces are used to explore the banking industry which is selectedfor this paper. To begin with, there is rivalry amongst the banks due to the emergence of new products, pricing strategies and the forces in the market which cause competition (Rothaermel, 2015). The potential entrants within the bank industry impact the diversity of the banking activities. The threat of the substitutes within the banking industry exposes the banks to competition from other financial sectors. They include the non-banking financial institutions. The buyers bargaining power creates competition from within and outside the banking industry (Porter, 2016). In this case, borrowing increases hence other financial institutions are opened,
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