Research Paper on Michael Porter's Model: Analyzing Competitive Strategies

Introduction

Michael Porter's model usually analyzes the competitive strategies of an organization by examining its competitive environment. The model is beneficial and useful in explaining both the strengths and weaknesses of any organization. The model identifies competition as a significant threat of an organization since it reduces the overall profitability (Porter, 2008). This question has looked at five components of the model, as stated below;

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Rivalry Intensity Among Competitors

This component considers the number of competitors as well as their impact capabilities in the market. The company's power has an inverse relationship with the number of competitors and the goods and services they offer. That to say, an organization that provides products and services that do not satisfy customers will operate under pressure, since the customers have enough and better options to choose from.

Threats of Potential Entrants

The state of an organization can be affected by new entrants in the market. A situation where competitors may require fewer efforts and resources to get into the market may weaken the strength of a company in the market. This is simply because new companies have a tendency to review and working on the problems facing the current company and innovating than the existing company (Porter, 2008).

Supplier's Bargaining Power

The component of the supplier's bargaining power is used to show the importance of suppliers in increasing the production of goods and services. The supplier's ability is influenced by factors like; the quality of products produced and services offered by suppliers as well as the associated cost.

Buyer's Bargaining Power

Buyers are always concerned about driving the price of a product down or getting the best price. This is influenced by factors like; the number of customers in a company, the significance of customers, and how easily they can be dawn out of the company (Porter, 2008).

Pressure/Threats of Substitute Products

Sometimes competitors may produce goods and services that may act as substitutes to the customers. This can act as a threat to a particular organization. Therefore, the organization can work under pressure, to ensure that goods and services it offers are meeting the customer's desires to outstand whatever is produced by the competitors.

Case Study: How a component relates to Calvin Klein Company

Competition for Calvin Klein Company is medium since other fashion companies are doing well in the United States like; Hugo Boss and Ralph Lauren. To start with, Calvin Klein has a firm hold in the market that usually limits new companies from joining the industry. Calvin Klein also has product differentiation to enhance brand loyalty and customer loyalty. This creates a barrier to new entrants, since they may invest a lot in the advertisement. These factors, together with favorable costs to the customers, are also used by Calvin Klein to gain a competitive advantage over other companies. Also, the company has been researching goods that are highly demanded to ensure that their customer's needs are well met. Calvin Klein is also facing threats of a substitute. As said earlier, other companies like Hugo Boss and Ralph Lauren are producing substitute products to those produced by Calvin Klein. Therefore, Calvin Klein usually observes customer relation, innovation, quality, as well as the efficiency of its products to ensure that they are appealing to their customers. Bargaining power of buyers from Calvin Klein is achieved through having a variety of products, and economies of scale. In addition, the company ensures that it has differentiated products to avoid buyers in forcing the prices down (2019).

UTV and Disney: A Strategic Alliance

According to the Harvard Business Review case 'UTV and Disney: A Strategic Alliance (A),' the article explains the predicament senior vice president faces in developing the business and strategies. There is a challenge in determining whether the UTV Company was to form a joint enterprise with the Disney company in 2006 (Walt Disney). This would be despite having the intention to promote Hungama TV, which was known to be the leading children's channel. UTV software communications Limited is also known as one of the biggest industries in India that deal with media and entertainment. The company is known to have interests in press, TV, films, music, animation, and new media contents. The UTV company presence was still limited despite being in operation in the United Kingdom, the United States, and other nations two years earlier. UTV was the first cable TV to operate in India. The company later ventured into the film business and launched global film distribution network. There was an intention by the CEO to have UTV expand by twice, starting 2008 to 2010. To achieve this, it was thought that getting into an alliance with Disney would be of great help (Atanu, 2010).

The strategic alliance was seen to increase commercial business worldwide. To conclude, there was deliberation from UTV top members, and they had come up with several recommendations. They wanted to scale up the UTV operations and expand their base beyond the Indian market; they wanted to start new verticals as well. They also wanted to increase in international markets; the best way to achieve had a partnership. Another solution was acquiring companies that seemed promising, as this would help in their expansion. Basing on these factors, the company that was the best suit is Walt Disney that was a leading diversified company dealing in media and entertainment. UTV vice president also observed Disney as a company that would cooperate based on the fact that it had a previous strategic alliance (Atanu, 2010).

According to this case, there were several learning objectives, which include; discovering the probabilities in engaging in multinational strategic alliances to make larger enterprises. Another goal is developing a mutual benefit technique that embodies several business stakeholders. There is also investigate of prices and get the advantage of international mergers and finally emerging business opportunities through collaboration with cross border entities. There has been growing interest in how competitive forces impacts organizations.

Components of Porter's model in HBR case

Risk of Entry by Potential Competitors

In India, UTV company is known as being the first cable TV to operate. Due to the high cost involved in entry and production in the media and entertainment industry, the entrance of competitors is low. High capital and nature of the market that makes it hard to learn about the market in the long term puts off new entrants. Innovation by the UTV Company, whereby they created different programs that were delivered to different age groups, made them enjoy brand loyalty from their viewers. UTV company also had been running well making good profits

Rivalry among Existing Firms

Companies are competing for the shared market, for instance, UTV Company has Hungama TV that has competitors such as Toon Disney Cartoon network and Disney channel. This existing firm makes the competition to be high. Through joint ventures with Disney, which is an international company that makes UTV a global company, this helps it to have an advantage in competing with its rivals. UTV has continuously found ways to remain in the entertainment industry as the exit barriers were high; it also gave it an edge to stay in operation and scale-up. In this competition, strategic partners and foreign investors were critical.

Threat of Substitutes

This refers to other sources of entertainment people can rely on. The danger was great for the substitutes taking into consideration that technology was changing, and millions of people shifted their entertainment into the internet, mobile phones, and other music systems. Being a challenge to UTV TV channels, they had to change ways on how to remain relevant to this. They focused on programs for children. They came up with Hungama TV as they saw no other channels set up for the young viewers

Bargaining power of buyers

Due to globalization, buyers will need new content. UTV Company in pressure to deliver new materials and evolve with change of things. The bargaining power of the consumers also increases due to the low cost of switching channels. Besides this, viewers have alternative sources of entertainment.

Bargaining Power of Suppliers

In this case, media content providers are several. Several TV channels in India get television content from UTV. There is low bargain power for the suppliers. Despite the creative content from the UTV, there was the risk in content, and resulting business returns were low.

Reference

Atanu Adhlkart. (2010) UTV and Disney: A Strategic Alliance. Ivey.

Porter, M. E. (2008). Competitive strategy: Techniques for analyzing industries and competitors. Simon and Schuster. (2019). Retrieved 26 September 2019, from https://www.calvinklein.us/en