Thes Competitive Advantage For Success By Michael E. Porter

One of the greatest artist Pablo Picasso once said, â€Å"Action is the foundational key to success†. Well, we all agree with this quote, but there are many variety of factors that also implies in aspect of life. In the field of business, one of the key elements that ultimately controls the destiny of an organization, is their competitive advantage in a particular industry. The competitive advantage is defined as â€Å"an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices†(Competitive Advantage | Business.). In order to deeper understand of competitive advantage in a firm, I chose to read the book â€Å"Competitive Advantage†¦show more content†¦The Five Forces are threat of new entrants, the threat of substitutes, bargaining of buyers, bargaining of suppliers, and rivalry among the existing competitors. The threat of new entrants refe rs to the barriers of entry to the industry and whether they are strong enough to prevent a lot of new companies from jumping in to compete. The threat of new substitute product is the ability of a customer to decide to use a different product, instead of one particular company’s product to solve the same problem. The bargaining of supplier means how much power does the company has to negotiate price and other terms the company’s supplier have. On the other hand, bargaining of buyer is similar to the bargaining of supplier, but as it applies to the customer. For example, does the company sells rare product that they cannot get from anywhere else? Or does the company sells the commodity product that they can easily buy from others. Lastly, rivalry among the existing competitors. It’s pretty straightforward and it refers to who else competing the same market with selling similar product. These forces change over time and can be influenced through strategic action s in a firm. Every firm in the industry always take one of the following strategies to achieve the competitive advantage. Which are cost leadership, differentiation, and focus.