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Discuss, using examples, how the Internet may change Michael Porter's five competitive forces. - Essay Example
Pages 5 (1255 words)
How the Internet may change Michael Porter’s five competitive forces? Introduction According to Michael Porter, the five competitive forces that affect an organization are; Threat of substitute products, Threat of new entrants, Intense rivalry among existing players, Bargaining power of suppliers and Bargaining power of Buyers (Porter’s Five Forces Model, 2009)…
The introduction of computers and internet has significant effects on Porter’s five forces model. According to Poon (1997), global computer network has far-reaching abilities and is capable of reducing the normal business expenditure. This paper analyses how Internet may change Michael Porter’s five competitive forces. How the Internet may change Michael Porter’s five competitive forces? Internet and Threat of substitute products Threat of substitute products is increasing day by day in global market after the arrival of internet and the subsequent development of ecommerce. As per the statistics released by US Department of Commerce in May 2005, e-commerce sales in the first quarter of the year had been $19.8 billion (Eschen, 2005). In other words, business in the virtual world is increasing rapidly at present because of the arrival of internet. It should be noted that Chinese companies are manufacturing plenty of duplicate products in their country. It is easy for them to make a duplicate for iPhone 5 or Galaxy S4 and sell it at a cheaper rate. People in America or Europe can easily purchase these duplicate products with the help of internet. In short, threat of substitute products is increasing day by day because of the arrival of internet and subsequent development of ecommerce. ...
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