FIVE COMPETITIVE FORCES THAT SHAPE STRATEGY

 

          In any organization, we need some tools that will assess the potential success of the organization. Porter’s five competitive forces is a competitive analysis model. This tool helps us to understand at the nature of competition within the industry, therefore it is used when completing the organization’s analysis. 

          These are the identified five forces which would impact on an organization’s behavior in a competitive market: 

 1.      The Degree of Rivalry 

          Potential customers or students have a transparent market where they can choose which school they want to enroll in. They can compare tuition fees and services among different schools. Our school is the only public school in the locality which offers collegiate degree at very affordable price. In spite of the high competition, we are not greatly affected because our school is located at the heart of  the town, thus it is accessible, that's why it is called cradle of towns.

2.      Bargaining Power of Your Customers 

          Our institution is trying to give students' best to equip them with knowledge and skills to become more effective and productive individual. So that if they exit in the portal of their alma mater they will become assets to the company. Also, the school is giving the scholarship to those deserving students.

3.      The Supplier (School) Power 

          A school basically needs qualified and competitive personnel, good and updated facilities and equipment, such as computer and science laboratories, library holdings, sports facilities and many others. These equipments if met by the school, of course it could attract students to enrol in that school.

 4.      Threat of Substitutes 

          The threat that substitute product in our school maybe in terms of services. This is true because you are not only the one who is in the market that offers such services. There are a lot of other schools that offers such services to the students. Also, there are small freelance shops that offer tutorials so you need to be equipped with tools that are conducive for learning. So, good service means a lot of costumers or clients.

      5.   The Threat of New Entrants

          Our school decline its enrolment last year because of shutting down of Surigao Development  Corporation (SUDECOR) due to total log ban. This is the only company in our town, it is sad to say that most of the students’ parents were working in SUDECOR where their source of living originated. Consequently, many families moved to neighbouring town Carrascal because they were jobless and there were three (3) mining corporation there, namely; MMDC, Carrascal-Nickel Corporation (CNC) and CTP. Our town Cantilan (headed by the mayor) is not a pro-mining.

          This tool would really be a perfect aid in assessing our organization’s strength and the ability to make a sustained profit in the industry especially nowadays that there is a stiff competition among different institutions in giving quality education to students. Porter’s model provides a good and powerful support for developing an understanding of the competitive forces in the industry.

          By these five forces, it will help the organization to analyze and determine what the organization’s competitors might do next. But, what did the organization do in response to the analysis is it will still depends in the organization’s strategy and creativity.