The five forces are: 1. Supplier power. An assessment of how easy it is for suppliers to drive up pr

The five forces are: 1. Supplier power. An assessment of how easy it is for suppliers to drive up prices. This is driven by the: number of suppliers of each essential input; uniqueness of their product or service; relative size and strength of the supplier; and cost of switching from one supplier to another. 2. Buyer power. An assessment of how easy it is for buyers to drive prices down. This is driven by the: number of buyers in the market; importance of each individual buyer to the organisation; and cost to the buyer of switching from one supplier to another. If a business has just a few powerful buyers, they are often able to dictate terms. 3. Competitive rivalry. The main driver is the number and capability of competitors in the market. Many competitors, offering undifferentiated products and services, will reduce market attractiveness. 4. Threat of substitution. Where close substitute products exist in a market, it increases the likelihood of customers switching to alternatives in response to price increases. This reduces both the power of suppliers and the attractiveness of the market. 5. Threat of new entry. Profitable markets attract new entrants, which erodes profitability. Unless incumbents have strong and durable barriers to entry, for example, patents, economies of scale, capital requirements or government policies, then profitability will decline to a competitive rate.

CASE OVERVIEW You are hired as the HR director for the fictitious Motors and More, Inc. Motors and More, a business-tobusiness sales company, manufactures small motors and accessories for industrial and home products. The industry is highly competitive, and the company follows a prospector strategy. A prospector strategy takes advantage of new markets and products (Gomez-Mejia, Galkin and Cardy, 2001). Organizational emphasis is on growth, innovation and new product development. A prospector wants to be first to market. To respond to competitive and rapidly changing markets, prospectors have flexible, flat and more decentralized organizational structures.

Using Porter’s Five Factors Analysis of competitive position, analyze the business strategy and describe your findings.

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