Assignment:
Question: Porter's 5 Competitive Forces, what do you believe is a limitation to only evaluating those competitive forces for that selected industry/company. In other words, what implications are NOT considered when only utilizing Porter's 5 Competitive Forces and how might you identify those additional external factors?
Debate, Agree or Disagree:
After completing my comments regarding the key drivers of competition in the retail industry based on Porter's 5 competitive forces in learning activity 1, I will discuss what implications are not considered. Porter's model does not take into consideration the impacts of other factors that influence an industry (Harrison and St. John, 2004).
Technological developments- affects the quality of the products and the ability of the firm to meet the consumer's demand by ensuring continuous production. Technology lowers the costs of production. It also facilitates production of high-quality products which create customer loyalty.
The legal-political environments- determines the course of actions in domestic and foreign markets. Governments and other political bodies dictate the conditions under which business operates. Unfavorable legal formalities lower the profitability of firms and ay force closing or shift to other locations. The laws require a company to uphold to set business ethics.
Socio-economic determinants- influences the products which firms produce. In a culture where certain commodities are prohibited, companies cannot sell their products due to cultural limitations. The socio-economic determinants are set of social responsibilities that the firm must abide to serve the community.