The Porter Five Forces Model is used to analyse the industry environment. Porter (1980, p. 28-29) also outlines the role of government in influencing each of the Five Forces both directly and indirectly.

Porter Five Forces Model and the influence of government

2006

Porter Five Forces Model and the Influence of Government

I . Introduction

Investing is a dynamics business activity that demands investors to have a good combination of knowledge about the assessment on performances of companies they want to invest in and how far investors should invest in the companies . Savvy investors will pore over every single financial performance of companies they pay attention to . Investing also becomes an effective tool to expand a company 's portfolio and to strengthen their presence

in other market

However , market expansion or even sustaining current position in a market is not a simple mission since a company must therefore examine their current and possible future position in a market through a series of business analysis

Concerning the analysis , any organizations especially ones dealing with business environment realize that their success depends on both internal and external factors . Under such circumstances , it is useful to carry out an analysis that takes into account not only the company 's internal factors , but also external factors such as activities of the company 's competitors and current industry situation as well

The famous SWOT , which consists of Strengths (S , Weaknesses (W Opportunities (O , and Threats (T , emphasizes the analysis from the internal factors . However , this will discuss another type of industry analysis , the Porter 's Five Forces . This kind of analysis emphasizes the external factors , which influence a corporation 's operation . The Porter 's Five Forces consider five factors in their analysis : the threat of new entrants , power of buyers , power of suppliers , rivalry among existing competitors , and the threat of substitute products

This , in general , composes of two sections . The first section produces a report that analyzes the actual and potential influence of government decision-making on each of the Five Forces . To provide a comprehensive illustration about the influence of government , there are some examples from a range of different industries including the case on Deutsche Btzrse , a German transaction service provider that announced their intention to buy London Stock Exchange for ?1 .35 Billion

The second section is about developing two scenarios on using one of five forces in the Tobacco industry in the UK in the year 2020 . Scenario 1 describes conditions where the Tobacco industry is influenced by government than it is at present . Meanwhile , scenario 2 illustrates conditions where the Tobacco industry is less significantly influenced by government than it is at present

II . Porter 's Five Forces and Influence of Government

II .1 Influence of Government on Porter 's Five Forces

At the heart of this analysis is the industry analyzing model known as Porter 's five forces model which details the threat of new entrants power of buyers , power of suppliers , rivalry among existing competitors and the threat of substitute products for market place organizer or transaction service provider industry satisfy following diagram Figure 2 Diagram of Porter 's Five Forces

Source : Porter , Michael . 1998 , Competitive Strategy : Techniques for Analyzing...