Business Report: Competitive Forces and Generic Strategies Analysis

This report analyzes the competitive forces and generic strategies within the home entertainment business. It begins with an examination of Porter's Five Forces, including the intensity of rivalry, the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products. The report then explores the generic strategies of cost leadership, differentiation, and focus, demonstrating how businesses can gain a competitive advantage. The report emphasizes the significance of product differentiation, brand recognition, and efficient cost management within the home entertainment industry. The report uses the example of Sony to illustrate the application of these strategies. The report concludes by offering a summary of the key concepts and their practical implications for businesses in the home entertainment sector. This analysis is designed to provide a comprehensive understanding of the competitive landscape and the strategic choices available to businesses in this industry.

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Porter’s Competitive Forces
Porter’s competitive forces shape every industry by determining the sector’s weakness
and strength. The first of these forces is the competition in the industry. Here, the number of
competitors and products they offer is determined. A presumption is made as the larger the
number, the higher the chances of the competitors being a threat as both buyers and suppliers
seek attractive deals. The second force is the potential of new entrants into an industry (Tang,
2014, pp. 108). The weakening of a company’s position is significant if it uses more money and
time to get into a market compared to its competitor, thus affecting the company’s power.
The third force is the power of suppliers. When a client has over-dependence on a
provider because the vendors available are few, the providers tend to hold more power. Providers
of the major entertainment, goods and services than raise prices. The fourth force is the power of
customers. When the number of clients is less, and each of this buyer is significant to the
company, the customers then hold power and can drive prices down (Porter and William, 2016,
pp.201). The fifth force is the threat of substitutes. The power of a business weakens when
buyers find a substitution for the entertainment goods and services they are offering from its
competitors.
Generic Strategies
Home entertainment business adapts generic strategies to achieve a sustainable
competitive advantage over its competitors in the market (Merchant, 2014, pp.306). These
policies help to provide a high value of products and prices to its customers. In the home
entertainment, adapting differentiation focus as a strategy is key. Product development gives

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uniqueness to products when made attractive by way of integration of new features. The
integrated features in goods such as the PlayStation by Sony make it stand out in the market. The
production cost reduces and the profits made by the business continuity.
The second generic strategy is differentiation leadership. This approach helps in market
penetration, the uniqueness of home entertainment products such as the Sony branding boosts the
company’s market penetration and offer competition against its competitors. The company also
holds marketing campaigns to enable it to penetrate the market for business to grow and increase
its market sales. The third generic strategy in the home entertainment business is cost leadership
that helps in market development. The company aims to be a lowest-cost producer (Spry and
Lukas, 2016, pp.866). It releases its products to new markets where it is not well established and
enjoy the best profits. Capital used is well utilized, and technology employed in the production
process is efficient.
Cost focus is the fourth strategy. Home entertainment companies concentrate on low-cost
products and services they offer in a limited number of markets. While their competitors offer
the goods at a higher cost.

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Bibliography
Merchant, H., 2014, Configurations of governance structure, generic strategy, and firm size.
Global Strategy Journal, 4(4), 292-309
Porter, T. and Williams, R., 2016. States, markets and regimes in global finance.
Spry, A., & Lukas, B. A., 2016, Brand Portfolio Architecture and Firm Performance: The
Moderating Impact of Generic Strategy. In Looking Forward, Looking Back: Drawing on the
Past to Shape the Future of Marketing. Pp. 866-867. Springer International Publishing.
Tang, D., 2014, Introduction to Strategy Development and Strategy Execution.