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Porter Five Forces on Internet

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Porter Five Forces on Internet
Porter Five Forces Model in the internet era:
How internet opens and restricts new avenues of Porter Five Forces

BADM 470-02

Background:
“It is not possible to ignore the ability of the internet to unlock a company’s wall, to discover and exploit opportunities outside its existing businesses…”
“The use of internet has not changed the basic economic laws, but has changed the way the world does business”
Cooperation of key industry players would facilitate innovation and thus increase expansion
Analysis
Internet has changed how business takes place and has also impacted company’s strategy. With many new online retailers, internet has increase the pressure on traditional 5 forces of Porter. It has also increased efficiency and is forcing retail stores to sell their products cheaper. For example, Blockbuster stores were forced to close down because it was not able to cut cost like I-Tunes website. Many traditional companies have also embrace internet and are also providing online delivery services. However, regardless of its importance, internet has not change the key success factor of the company, it is their product. For example London Drugs have an online website to display its products but their main success is their low price and quality of its product. Nonetheless internet increases the business value of the firm. An example of how business could increase its value is by providing potential investors the annual report online to let them examine and, hopefully, invest in the company’s stocks. Also, internet has help businesses in their daily operations and has increase mobility and communication among its stakeholders. For example, many suppliers check their retail outlets if the quantities of the products are at descend level and it may replenish by tracking it online through software, without contacting the management to order. Thus it is concluded internet has increase efficiency, communication and is effective.
Internet has a profound



Bibliography: Macleod, Ishbel. "Phlips and Asos unveil branded partnership with Carat." Drum 20 August 2013, n. pag. Web. 7 Feb. 2014. .

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