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2. Threat of new entrants - if there is strong threat of new entrants then current players will be willing to earn less profits to reduce the threats. 3. Bargaining power of buyers of Schools Spark – If the buyers have strong bargaining power then they usually tend to drive price down thus limiting the potential of the Schools Spark to earn sustainable profits. 4. Bargaining power of suppliers of Schools Spark - If suppliers have strong bargaining power then they will extract higher price from the Schools Spark. 5. Rivalry among existing players – If competition is intense then it becomes difficult for existing players such as Schools Spark to earn sustainable profits.
Why Porter's five forces analysis is important for casestudyname?
You can use Porter Five Forces model to analyze the competitiveness faced by protagonist in casestudy. Porter five forces analysis of casename case study will help you in understanding and providing solution to – nature & level of competition, and how Schools Spark can cope with competition. Even though from outside various industries seem extremely different but analyzed closely these five forces determines the drivers of profitability in each industry. You can use Porter Five Forces to understand key drivers of profitability of Schools Spark in casename case study.
Porter’s 5 Forces, Competitive Forces & Industry Analysis
The core objective of strategists and leaders in an organization is to help the organization to build a sustainable competitive advantage and thwart competitive challenges. Step 1 – Defining relevant industry for Schools Spark in casestudy Step 2 – Identify the competitors and group them based on the segments within the industry Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. Step 4 - Determine overall industry structure and test analysis of consistency Step 5 – Analyze recent and future changes in each forces Step 6 – Identify aspects of industry structure based on Porter 5 Forces that might be influenced by competitors and new entrants.
How is Porter's five forces framework used in developing strategies?
To achieve above average profits compare to other industry players in the long run, Schools Spark needs to develop a sustainable competitive advantage. Industry analysis using Porter Five Forces can help Schools Spark in casename case study to map the various forces and identify spaces where Schools Spark can position itself. By doing Industry analysis using Porter Five Forces, SPARK Schools: Kindling Innovation Primary Schools can develop four generic competitive strategies.
The four generic competitive strategies that can be pursued in casename case study are -
Cost Leadership
In cost leadership, SPARK Schools: Kindling Innovation Primary Schools can set out to become the low cost producer in its industry. How it can become cost leader varies based on the industry forces and structure. In pursuing cost leadership strategy, Schools Spark can assess – (pursuit of economies of scale, proprietary technology, supply chain management options, diversification of suppliers, preferential access to raw materials) and other factors.
Differentiation
Schools Spark can also pursue differentiation strategy based on the industry forces description in casename case study. In a differentiation strategy Schools Spark can seek to be unique in its industry by providing a value proposition that is cherished by buyers. Schools Spark can select one or more attributes that can uniquely position it in the eyes of the customers for a specific needs. The goal is to seek premium price because of differentiation and uniqueness of the offering. Industry analysis using Porter Five Forces can help Schools Spark to avoid spaces that are already over populated by the competitors.
Focus - Cost Focus & Differentiation Focus
The generic strategy of Focus rests on the choice of competitive scope within an industry. Schools Spark can select a segment or group of segment and tailor its strategy to only serve it. Most organization follows one variant of focus strategy in real world.
he Focus Strategy has two variants.
(a) In cost focus a SPARK Schools: Kindling Innovation Primary Schools can seek a cost advantage in its choses segment in casecategory. (b) In Differentiation strategy SPARK Schools: Kindling Innovation Primary Schools can differentiate itself in a target segment in its industry. Both variants of the focus strategy rest on differences between a SPARK Schools: Kindling Innovation Primary Schools ’s target segment and other segments in the industry.
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