Do it yourself - Evaluate the attractiveness of a sector using Porter's 5 forces as an example
Posted: Sun Dec 22, 2024 10:34 am
One method used to analyze the market is Porter's 5 forces.
Porter's 5 Forces analysis is used to assess the attractiveness of an industry and is based on 5 different factors related to the company's environment.
It is worth applying Porter's 5 forces when considering whether to enter a indonesia whatsapp mobile number particular market.
The 5 forces analyzed in Porter's method are: bargaining power of suppliers, bargaining power of buyers, intensity of the competitive struggle within the sector, threat of new producers, threat of substitutes.
A proper analysis must begin by defining the sector in which the company will operate.
Once the sector has been defined, its size and dynamics must be determined.
After carefully examining the industry, look at each of the 5 forces, assign each of them a set of factors that have a significant impact on that part of the market, and then evaluate these factors based on their impact on the company's environment.
Once all the forces have been analysed, an overall assessment of the attractiveness of the sector can be made.
In practice, Porter's 5 Forces analysis is often extended with other methods, such as SWOT analysis or the PEST method.
More details below.
Many companies, especially young and innovative ones, make their decisions based on experience or instinct. They often rely on their intuition without basing their decisions on "hard" figures or analysis. Excuses can be made for the lack of funds for market research, but it is worth considering whether the costs associated with a bad decision will not be greater than the expenditure on market research and analysis. Is it not more beneficial to spend more money and time now than to "go bankrupt" later because of a bad decision?
Porter's 5 Forces analysis is used to assess the attractiveness of an industry and is based on 5 different factors related to the company's environment.
It is worth applying Porter's 5 forces when considering whether to enter a indonesia whatsapp mobile number particular market.
The 5 forces analyzed in Porter's method are: bargaining power of suppliers, bargaining power of buyers, intensity of the competitive struggle within the sector, threat of new producers, threat of substitutes.
A proper analysis must begin by defining the sector in which the company will operate.
Once the sector has been defined, its size and dynamics must be determined.
After carefully examining the industry, look at each of the 5 forces, assign each of them a set of factors that have a significant impact on that part of the market, and then evaluate these factors based on their impact on the company's environment.
Once all the forces have been analysed, an overall assessment of the attractiveness of the sector can be made.
In practice, Porter's 5 Forces analysis is often extended with other methods, such as SWOT analysis or the PEST method.
More details below.
Many companies, especially young and innovative ones, make their decisions based on experience or instinct. They often rely on their intuition without basing their decisions on "hard" figures or analysis. Excuses can be made for the lack of funds for market research, but it is worth considering whether the costs associated with a bad decision will not be greater than the expenditure on market research and analysis. Is it not more beneficial to spend more money and time now than to "go bankrupt" later because of a bad decision?