Over 30 years ago Michael Porter identified a holistic appro

Over 30 years ago Michael Porter identified a holistic approach to understanding how competitive forces shape strategy. He posited that the only way to truly insulate an organization from underlying economic volatility is by understanding the 5 competitive forces and how they relate, fundamentally, to the organization.

The five forces are:

Rivalry among existing competitors

The bargaining power of Suppliers

Threat of New Entrants to the market

The bargaining power of Buyers

Threat of Substitute Products/Services

Using the industry/company selected in the Week 1 Learning Activity ( Ryder\'s) , identify the key drivers of competition for that industry and specifically for the selected company using the Five Force model. Explain how those external competitive forces are affecting the industry and company and the effect of those forces on the overall strategic planning processes uniquely for that company and generally for that industry. Offer supporting rationale for your explanation and be sure to reference your statements using proper APA formatting.

Logistics & Transportation - Ryder System is the selected industry / company

Solution

Answer:

The Porter’s five force analysis is basically to understand the competition in the market. These five forces help to understand the competition drivers in the market. In a market, the competition can be assessed by five different directions. These five directions are important enough and had significant impact on the competition. The five forces are as below

Force 1 : The Threat of New Entrant – A business is always can have a threat from a new entry for the competitor in the market. The new entrant can have big impact on the organization.

Force 2 : The Threat of Substitutes – The threat of substitutes is a big force which can have adverse effect on the organization’s survival. It is so quick that the organization will not have sufficient time to manage the entry of substitute.

Force 3 : Bargaining power of Customers- This is another force of competition. This force will develop the pressure on the organization. If the customer has multiple options for our product, then the scenario will be further tough. The competitors will try to explore this chance.

Force 4 : Bargaining power of Suppliers – This is another force of competition develops from supplier. If the supplier knows that he is single source to the organization, he will try to explore this situation and can increase the cost of raw material. This can lead to have the different pressure on the organization from supplier side.

Force 5 :Industry Rivalry – Competitive industry rivalry is different force which has a big impact of the organization. We need to understand the industry rivalry force and take appropriate action to manage the impact.

Logistics & Transportation - Ryder System is the selected industry/company

Question: Identify the key drivers of competition for Logistics & Transportation - Ryder System industry

Answer: The followings are the key drivers for the competition for Ryder System are as below

Question: Specifically for the selected company using the Five Force model, explain how those external competitive forces are affecting the industry and company and the effect of those forces on the overall strategic planning processes uniquely for that company and generally for that industry.

Answer: These external competitive forces are affecting the company significantly as they can make the survival impact on the company. These external forces may result in reduction in customers, profit, non-survival of business etc. So these forces can have critical impact on the company. So the Ryder system requires developing the strategy in line with managing the external forces of competition, in order to survive and generate revenue from the business. The strategic planning is affected with these external forces and it is tuned to develop the strategy to manage these forces in long term. Thus the Ryder system needs to have the strategic planning for managing these external forces for supply chain management and fleet managements.