Application of Porter’s Five Forces model

This presentation covers the application of Porter’s Five Forces model in business strategy. It includes analysis of Threat of New Entry, Threat of Substitution, Buyer Power, Supplier Power, and Competitive Rivalry. The presentation focuses on the food and beverage industry and how 7-eleven can maintain its position in the market. The report also suggests that the company should formulate strong policies and strategies to overcome the factors affecting its performance.

Business Strategy (P3)

Content
 Introduction
 Porters five forces
 Conclusion
 References

Business strategy can be defined as a process which
involves competitive actions and moves that a
organisation use to attract new customers. It also
involves various strategies which help the business in
successfully carrying out its operations. Every
company formulate business policies in order to
properly utilise the resources. This PPT will cover
Porters five forces and its application in business
Introduction

Application of Porter’s Five Forces model
In order to analyse the internal environment of a business it is compulsory to perform
porter's five forces analysis. The porter's five forces model is a deep approach which is
helpful in determination of forces which impact on the internal environment of the
company.
•Threat of New Entry
•Threat of Substitution
•Buyer Power
•Supplier Power
•Competitive Rivalry

Threat of new Entrants
The company deals in food and beverages and entering in the new market can be a
big threat for the new players. The bigger players in the market can easily provide
large discounts to the customers in order to retain them. The existing players
operate on a large scale and easily achieve economies of scale. The requirement of
the capital is also very high for the new entrants. This creates a barrier for them to
enter into the market and compete with the existing players. The company can
enjoy its position in the market because the entry barriers are very high and
therefore the threat from the new entrants is low.

Threat of Substitute
It involves the imitation which can be done by the competitors in the market.
Since the company 7-eleven operates in retail industry, the products can be easily
imitated by the other companies. The customers can choose the similar products
within the same price range(Miao, Saide and Muwardi, 2021). The products are
not highly differentiated in this kind of industry. Therefore the threat of substitutes
is a weak force and the company has to keep this in mind to maintain its
dominance in the market.

Bargaining power of customers
There are so many customers in the market for
these retail products. It gives them the right to
bargain for the prices in the market. The
company also cannot differentiate in the products
to a large extent. Most of the customers are price
sensitive and less brand loyal.

Bargaining power of Suppliers
There are large number of suppliers in the
market which means that the suppliers cannot
fix the price of the products according to their
needs. The suppliers do not possess any
differentiated products which limits their
bargaining power in the market.

Competitive Rivalry
7-eleven has many competitors in the market
which makes it very difficult to maintain the
strong position in the industry. There is
intense competition in the market due to the
presence of large players. This force is a
strong force in the industry.

Conclusion
7 eleven should analyse both the internal and external environment of the business to be
able to successfully conduct all its operations. The company should try to formulate
strong policies and strategies to overcome the factors which are affecting the performance
of the organisation. The report has also covered various analysis to identify the current
status of the company in the market.

References
Anderson, P.L., 2019. Business strategy and firm location decisions: Testing traditional
and modern methods. Business Economics, 54(1), pp.35-60.
Hristov, I. and Appolloni, A., 2022. Stakeholders' engagement in the business strategy as a
key driver to increase companies' performance: Evidence from managerial and
stakeholders' practices. Business Strategy and the Environment, 31(4), pp.1488-1503
Liu, C. and Kong, D., 2021. Business strategy and sustainable development: Evidence
from China. Business Strategy and the Environment, 30(1), pp.657-670.

Thank You