Sample Essay
Porter 5 forces, SWOT and PEST Analysis are all carried out for the purpose of carrying forward analysis on the industry in which the business operates. Porter 5 forces evaluate the overall competitive forces in the industry in which a business operates. The Porter analysis examines three horizontal forces, or competition in the same industry: Threat of new entrants, threat of substitute products and threat of established rivals. Two forces are from vertical competition, or those from the supply-chain: Bargaining power of customers and bargaining power of suppliers (Morgans, 2002, p.34).
Threat of new entrants for the Ford Australia is in form of new automobile companies that are actually entering in Australian Automotive industry and trying to compete with Ford on better quality, technology and price. Companies like Subaru and Citroen have been the entrants in the market. Although the new entrants are unlikely to compete effectively with giants like Ford and GM but such entrants do make difference in the sales volume of Ford (Morgans, 2002, p.34).
Bargaining power of buyers explain that to what degree customers push the price of the new vehicles down. Ford Australia has been present in the market for years and till now the bargaining power of buyers exists. With many vehicles available for buyers to choose while making buying decision, customers are often found pushing the prices low for the Ford vehicles (Lewis, 2003, p. 104).
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