There are three layers in the organisation contest,include internal,competitive and external.
Porter(1980a,1985) proposed five forces analysis in organisation contest, they are bargaining power of suppliers, bargaining power of buyers, treat of new entrants, treat of substitutes and industry competitors. Five forces analysis is relevant to the profitability of an organisation.
Firstly, the bargaining power of supplies depend on what are they provided for the company. If the supplier provided a larger proportion of the total cost of the raw material or on the production process is very important to buyers, the supplies could have big bargaining power of supplier. And the company just could buy it and raise prises. At second, the bargaining power of buyers, it is depend on buyer compare the products. sometimes, if a few people need a that, and the buyer will buy mots of products from one company, the buyer have big bargaining power. Then, treat of new entrants, the leader will consider how much benefit they could get, how much cost will they pay and the risk. Treat of substitutes, it means that two different products have the same function, they could do the same work.
SWOT ( strengths Weakness Opportunity Threats )
We could think about it in two parts. First one is SW ( strengths weakness ), this is internal, people could analyze internal conditions. Secondly, it is OT ( Opportunity Threats ), people could analyze external conditions. When a company make a plan about develope strategies and competitor analysis case, they always use SWOT analysis., it is clearly to see what about the plan. And when you use it, you should be objective to face the strengths and weakness, how about your company at present and in the future.It is different between everyone to use it.
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