Strategic Recommendation Memo

MGT576_v1_Wk3_Porters_Five_Forces1.pdf

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MGT/576 v1

Porter’s Five Forces Complete the table below. For the company you’ve decided to assess in week 1, determine the strength of each of Porter’s Five Forces and of the complementors. Justify your determination with examples.

Industry force Strength Provide a justifying your determination

with examplesHigh Medium Low

Example x This is why I believe it is medium.

Threat of new entrants X The existence or absence of new enterprises or new entrants in the consumer products industry affects Procter & Gamble's success. The impact of new entrants on existing businesses and the industry as a whole is analyzed in this section of Porter's Five Forces Model. It is essential that Procter & Gamble's plans take into account the following external elements that contribute to the mild severity of the threat of new entrants:

 There aren't many fees involved with making a change (strong force)

 Average Investment Prices (moderate force)

 Small- to Medium-Sized Scale Economies (moderate force)

Power of buyers X To increase sales of its consumer products, the Procter & Gamble Company concentrates on meeting the wants and requirements of its target market. The level of customer satisfaction is one of the five factors evaluated in Porter's Five Forces Model of Industry Analysis. This factor accounts for the effects of consumers and purchasers on businesses and the industry as a whole. Customers or purchasers' negotiating power is modest because of the following external issues, all of which Procter & Gamble must handle.

 There aren't many fees involved

Porter’s Five Forces MGT/576 v1 Page 2 of 3

Industry force Strength

Provide a justifying your determination with exampleswith making a change (strong

force)  Lack of readily available

alternatives (weak force)  Strong consumer interest in

general (weak force)

Power of suppliers X Procter & Gamble relies on its suppliers to provide the company with the raw and intermediate materials necessary to run its business. Porter's Five Forces Analysis includes a consideration of how suppliers affect the state of the industry's overall environment. The lackluster impact of suppliers' negotiating strength on Procter & Gamble and the consumer products sector may be traced to the following exogenous factors:

 Slightly integrated into the future (moderate force)

 Ample supply in general (weak force)

 Supply-side population density somewhat high (weak force)

Power of substitutes X Products from Procter & Gamble have alternatives on the market. This part of Porter's Five Forces Analysis looks at how the threat of substitute products affects both individual businesses and the overall market for the sector. Procter & Gamble faces a modest level of substitutes threat as a result of the following external factors:

 There aren't many fees involved with making a change (strong force)

 Lack of readily available alternatives (weak force)

 a scarcity of viable alternatives (weak force)

Rivalry among competitors X Procter & Gamble's competitive advantage and how the company grows competitive in the consumer goods market are both influenced by the company's competitive rivals. Competition's impact on the industry environment is analyzed in this section of Porter's Five Forces Model. Procter & Gamble faces fierce competition due in part to the following external factors:

 Massive Variety of Businesses

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Industry force Strength

Provide a justifying your determination with examples Extremely Diverse Number of

Businesses (strong force)  Low barriers to entry (strong force)

Complementors X Colgate-Palmolive, Church-Dwight, and Unilever are just a few of P&G's main rivals. P&G obtains about two-thirds of its sales from established countries, whereas Unilever gets the bulk of its income from developing markets, which are rising at a quicker pace.

References: Han, C., Thomas, S., Yang, M., & Cui, Y. (2019). The ups and downs of open innovation efficiency: the case of Procter & Gamble. European Journal of Innovation Management. Day, G. S., & Shea, G. P. (2021). Innovating how innovation works at Procter & Gamble. Strategy & Leadership.