PORTER'S MODEL OF 5 FORCES: PORTER'S MODEL OF THE COMPANY FORMA NOVA

Abstract

Which are the ways that one can compete and a can create a competitive advantage, today is often an issue of debate that is being discussed by companies when entering a particular industry market. Under high development of the modern market, companies are increasingly required to conduct a detailed market analysis including all its segments in order to survive on it, either locally or globally, depending on their priorities.
The dynamic and changeable market seeks from companies to take care not for their products and services only but for their customers as well, for input suppliers, but they must not neglect competitors. The importance of all these segments were unified by the American economist Michael E. Porter, who set up the industry analysis framework and business development strategy, known as the five forces model of Porter's competitiveness.
The model of the five forces of competitiveness starts from the assumption that suppliers can become competitors of the company, if the profits are realized in the business. Buyers, in certain situations, through the strategy of vertical integration backwards, can become competitors in the activity.
Similar is to those companies that want to conquer a new market and the products they produce are a substitute and become competitors of existing companies in function. The five forces model determines the profitability of the activity, since they affect the prices, expenses and required investments by the company.