Identify six forces of change and provide examples of each
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General Management
Identify six forces of change and provide examples of each
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The six forces model is an analysis model used to give a holistic assessment of any given industry and identify the structural underlining drivers of profitability and competition The model is an extension of the Porters five forces model proposed by Michael Porter in his 1979 article published in the Harvard Business Review How Competitive Forces Shape Strategy The sixth force was proposed in the mid1990s The model provides a framework of six key forces that should be considered when defining corporate strategy to determine the overall attractiveness of an industry The forces are Competition assessment of the direct competitors in a given market New Entrants assessment in the potential competitors and barriers to entry in a given market End Users Buyers assessment regarding the bargaining power of buyers that includes considering the cost of switching Suppliers assessment regarding the bargaining power of suppliers Substitutes assessment regarding the availability of alternatives Complementary Products assessment of the impact of related products and services within a given market Competition There are several dimensions that rivals within an industry can compete on price discounting cost leadership strategy introduction of new services products innovation strategy improvement of service quality customerorientation strategy etc High competition between rivals can stifle an industrys profitability Intensity if competition is highest if Competitors are equal in size and power as poaching business is hard to avoid Industry growth is slow This causes competing organisations to fight for market share Exit barriers are high eg highly specialised assets and management devotion This can cause companies making low or negative returns to stay in the market leading to excess capacity
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