Porters’ five forces have been a serious influence in the field of economics. The five forces include; the negotiation power of the suppliers, the negotiating power of the customers, the threat of entry into the market of new products, threat from potential entrants of competitors and finally, the internal competition among firms already in the industry. A proper analysis of these factors helps an organization to perform a proper environmental scanning exercise that in turn determines how competitive the organization can be in the market/industry.
Many organizations prefer to use a combination of porters’ five forces together with another one like SWOT analysis. When two or more methods are used to ascertain a particular condition, it normally goes without failure that the result will be impressive since the two or so methods, countercheck each other in a process known as triangulation. Porter’s five forces Silverstar holdings experience, stand out as one of the most known success stories of the same. The organization applied these five forces when the competition did not bother to do the same.
As a result, they managed to gradually achieve a competitive advantage based on the strategic plan they had made from the environmental analysis stage. Their success with the five forces has been cited as an example of how successful the proper utilization of porter’s five forces can be if one wants. They moved from a middle level organization to a high level organization having achieved four-fold profit margins. Any organization that starts up in the same industry today, use Silverstar holdings as a benchmark for their planning and operational goals. The contribution made by Porter in this regard therefore stands immortal to date and have helped so many organizations.
