Strategic Marketing: Planning and Control, Third Edition

This model allows an organisation to identify the major forces that are

present in the industry sector. This can be related to the critical factors

that were identified by the PEST analysis. Several issues then need to be

considered:

● What is the likelihood that the nature of the relationships identified

by the ‘five forces’ model will change given the trends in the exter-

nal environment? Are there ways of benefiting from these potential

changes?

● What actions can the organisation undertake that will improve its

position against the current forces in the industry? Can the company

increase its power, relative to suppliers or buyers? Can actions be

taken to reduce competitive rivalry, or are there ways of building bar-

riers to dissuade companies from considering entering the industry?

Are there ways of making substitute products less attractive?

● The organisation will also need to consider their competitors. Given the

forces in the industry, what is the relative position of the organisation’s

rivals. Do conditions favour one particular operator? Could conditions

28 Strategic Marketing: Planning and Control

Suppliers

Substitutes

Potential

entrants

Competitiverivalry Buyers

Figure 2.4
The five forces
model (Source:
Adapted from
Porter, 1980)