Five Forces Analysis A well-known model that helps managers focus on the five most important competitive forces, or potential
Talia – Talia has worked diligently to cut costs at her company in order to sell her products at lower prices than her competitors can afford to sell theirs.
Brian – Brian is the only manufacturer of a specific part used in air force drones. He can dictate prices and delivery dates of his parts.
CB Homes – CB Homes constructs hundreds of homes each year and buys very large amounts of materials from its suppliers.
Sam – Same is thinking of opening a steak house. He has noticed that new restaurants always seem to be opening in his area.
McLaughlin – The company is able to buy electrical wire cheaply in many stores. There is always ore than one place to buy, and therefore the company can easily find the lowest prices.
Auto Manufacturers – They saw sales drop as more people started riding bicycles when the price of gasoline increased to unprecedented levels.
Time Warner Cable – The cable industry is made up of very few companies, ensuring that each makes a large profit.
Pentium – You can’t run a computer without a computer chip! Without the chip, you can’t have a computer. There is just nothing else you can use to do the same job.
Ten Medium Sized Companies – They banded together to order their raw materials from one supplier. This enables them to order in bulk and get a better price.
G’s Gems – The company is able to sell its jewelry at much higher prices than its competitors because of the high quality and workmanship in the products.
Five Forces Analysis A well-known model that helps managers focus on the five most important competitive forces, or potential threats, in the external environment is Michael Porter's five forces model. Porter identified five factors as major threats because they affect how much profit organizations competing within the same industry can expect to make. It is important for all managers to be able to analyze the effects of the forces when making decisions about entering, exiting, or staying in a given industry. When you have completed this exercise, you should be able to understand the basic elements of Michael Porter's five forces model and perform a basic five forces analysis. Roll your cursor over the following names and read the descriptions. Then, based on your knowledge of Porter's five forces, drag the name to the appropriate column. Remember that each of the elements can have high or low examples. McLaughlin Electric Time Warner Ten Medium-Sized сВ Homes Talia Cable Companies Auto Brian Sam Pentium G's Gems Manufacturers Level/Type of Rival ry Threat of New Entrants to the Industry Power of Suppliers Threat of Substitute Power of Customers Products