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Companies can implement Porter's Five Forces Analysis in their operations by following these steps:
1. Identify the industry structure and match the company's strengths and weaknesses to it. This can help in building defenses against competitive forces or finding positions where the forces are weakest.
2. Devise a strategy that takes the offensive against the forces driving industry competition. This strategy should aim to alter the causes of these forces.
3. Exploit changes in the industry. Evolution in the industry brings changes in the sources of competition, which can be exploited strategically.
4. Understand the multifaceted nature of rivalry. Growth and survival in the industry often depend on how well a company can navigate and leverage the complex web of rivalry.
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Competition management is at the core of strategy formulation and an understanding of the underlying sources of competitive pressure provides the grou...
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Positioning the company – "The first approach takes the structure of the industry as given and matches the company's strengths and weaknesses to it. Strategy can be viewed as building defenses against the competitive forces or as finding positions in the industry where the forces are weakest." Influencing the balance – "When dealing with the forces that drive industry competition, a company can devise a strategy that takes the offensive. This posture is designed to do more than merely cope with the forces themselves; it is meant to alter their causes." Exploiting industry change – "Industry evolution is important strategically because evolution, of course, brings with it changes in the sources of competition I have identified. In the familiar product life-cycle pattern, for example, growth rates change, product differentiation is said to decline as the business becomes more mature, and the companies tend to integrate vertically." Multifaceted Rivalry – "The key to growth – even surviva...
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