11 Jul POST 1) We have learned about the PESTEL (Political, Economic, Soci
POST 1) We have learned about the PESTEL (Political, Economic, Social, Technological, Ecological, and Legal) and Porter’s Five-Forces model to understand the industry competition. I feel at the end of the day these types of tools are used to open our perspective on the surrounding competition. Understand your business is only half of the solution, conducting a good SWOT (Strengths, Weakness, Opportunities, Threats) analysis will help you understand the second part of running a business which is the environment your business competes in.The competitive force definition (Five Force Framework) by Michael Porter is a model used to understand the difference from daily operational goals to strategic goals that are measurable through the attractiveness to the company that yields a profit. The Five Forces Framework (Threat of entry, Threat of substitutes, Power of buyers, Power of supplies, and extent of rivalry between competitors) if used will offer the best results for new companies or existing companies to review its current operational procedures (Johnson, Whittington, Scholes, Angwin, Regner, 2014, p.41, para. 4). The importance in the concept of strategic grouping and the Five Force Framework within industries is the comparison of like businesses that cause direct competition. Using the tools, we have learned this week provides good insight on how to keep the competitive advantage and ensure company and profit growth.When looking a company mission statements and reading this week’s lessons, I think the most powerful mission statement is Coca-Cola. The Coca-Cola mission statement does answer the nature of the business “To refresh the world…To inspire moments of optimism and happiness…To create value and make a difference.” (Coca-Cola, n.d.). I think that this is an excellent company mission statement to motivate employees around the world to help sell products. It provides everyone from the consumer to the employee with a sense of bringing happiness to all and is politically correct around the world that does not intrude on other cultures.POST 2)Porter’s Five Forces framework deals with competitive markets and the strategies to navigate within them. Those five forces are threat of entry, threat of substitutes, power of buyers, power of suppliers, and extent of rivalry between competitors (Johnson, Whittington, Scholes, Angwin, and Regner, 2014). If all five of these forces are high, there is too much competition and less reward. It is essentially not a great business opportunity to put yourself into. The higher the competition, the lower the prices and then buyers have more control. An example would be with electric or hybrid cars. If a Toyota Prius was the only option, it could corner the market with little competition giving it all the power. Now that so many automobile manufacturers have hybrid vehicles, the competition is high between companies. This drives down prices and gives the power back to the buyer. Another force is threat of substitute. This would be if someone wanted to save gas, but instead of a hybrid they bought a motorcycle. This also is a competitive factor. Power of suppliers would exist if only one company made the batteries for the hybrid vehicles. They would be able to drive up demand. The bottom line is it is best to place your company in an area that does not have to compete against these forces if possible. I chose Tesla’s mission statement to review: “Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible” (Alessio, 2018). I believe the statement nails the intent at Tesla. They are not boring electric cars, they are “compelling” and receive a ton of praise for their power and style. This statement tells employees that this isn’t your average fuel-saving car, it is an experience. This shows in its design and capability. Tesla stands out in an automobile company trying to keep up.
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