The paper "Porter’ s Five Forces Model and Strategies in Competitive Advantage" is an impressive example of a Business assignment. Competition exists between firms and businesses. This competition determines how attractive the sector is. The main reason why business competes is that businesses are struggling to maintain their power. Competition changes depending on sector development, diversity, and entry barriers. Here there is a focus on how many competitors, products, brands, strengths, and weaknesses as well as strategies, market shares (Porter 9). Middlesex Airlines faces competition from other airline companies that exist.
The airlines try to share the market. Reduced market share means reduced profits Threats of New Entrants Existing companies normally create barriers that prevent competitors from entering the market. When the barriers are high new entrants are normally faced with retaliation. There are six barriers to the entrance; economies of scale which makes new entrances either have a cost disadvantage of entering the market on a high scale. Product differentiation gives customers identities. Huge capital requirements are needed to acquire equipment, cost disadvantage, access to distribution channels, and stringent policies by the government that lower of new competitors entering the industries (Porter 3). As new Airlines emerge Middlesex Airlines will bring new capacity and desire to gain market share already occupied by Middlesex Airlines Threats of Substitute Products Substitute products normally provide alternatives to existing products in the market.
They limit the growth potential of an organization or a firm. This will force the upgrade of existing products or differentiating it through marketing. Without doing this the industry will suffer in earnings and growth. Substitute products come in more attractive packaging in terms of quality and price.
Substitute’ s products other than limiting the profits in normal times also lower the benefits during the boom time.
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