Porter`s Five Forces - Intel520-F. Khan

Porter’s Five Forces

Fuad Khan, Date (29 November 2010)

Mercyhurst College, Erie PA

Advanced Analytic Techniques Course

Purpose

The purpose of my paper is to assess the value of Porter's Five Forces analytical method for examining competitive market forces and formulating a winning strategy to counter those competitive market forces in U.S. Central Command (USCENTCOM) market space. The paper will also examine the effectiveness of Porter’s Five Forces analytical method in a personal test case. The analytical question for the test case is " Is company TNISO in a position to win contracts for Open Source Intelligence services focusing on the Middle East and South East

Asia with Central Command?

”

Three evaluation criteria used to assess the effectiveness of Porter’s Five Forces analytical technique are as follows:



Formulation of competitive business strategy: Formulate a winning strategy to counter market forces in USCENTCOM market space. This criterion has a weight of

50%.



Repeatability : Can we use Porter's Five Forces analytical method repeatedly under changing market conditions. This criterion has a weight of 25%.



Ease of use: Is it easy to create a potential winning business strategy using Porter's

Five Forces analytical method. This criterion has a weight of 25%.

When we measure Porter's Five Forces analytic method against the above three evaluation criteria, we come to the conclusion that it is the most appropriate method to analyze competitive forces and produce a winning strategy to counter those competitive forces in USCENTCOM market space.

Literature Review

Most authors have high confidence in using Porter’s Five Forces analytical method to analyze competitive market forces and formulate a winning strategy to counter competitive market forces in an industry. Two authors Wei-Ming and Irene Siaw successfully used product differentiation strategies to counter the competitive forces in the internet banking industry. The other authors performed in-depth survey of competitive market forces in e-commerce, mobile phone, and professional services industries.

The authors also found competitive forces, which were weak and not relevant. Generally, all authors used Porter’s Five Forces to gain a competitive advantage in the industry, outperform, and dislodge incumbents in their respective industries. Michael E. Porter in his classic paper introduced the Porter Five Forces analytical method. He cautioned that a strategy analyst could undermine the industry structure by creating new kinds of competition, which will not allow any company to win in the industry. Wei-Ming and Kang-Wei found the competitive forces in the

Taiwanese public sector industry using Porter’s Five Forces analytical method and then used cost leadership and service differentiation strategies to counter the competitive forces in the

Taiwanese public sector industry. Both researchers also found professional services firms deeply impacted by competitor rivalry. Competitors can use price reduction, service enhancement and social networks to win contracts. Some of the authors also advocated the use of product differentiation strategy to counter competitive forces in the banking industry. Irene and Alec also found that the internet has lowered the barriers to entry in most industries, a fact applicable to other service industries also. Yeo and Huang explored competitive forces in mobile phone ecommerce industry. They found brand names are significant barriers to entry into the mobile phone e-commerce industry. It is very hard to capture market share from an established industry player with established brand name.

There is a risk of business failure or collapse if the analyst identifies incorrect or irrelevant competitive forces in an industry. Academic researcher Sritkant Parthasarathy explored the competitive forces in Indian business industry. Sritkant found state protectionism and lack of infrastructure to be barriers to entry in the Indian business industry. He also found suppliers in developing countries could pressure incumbents by providing low quality products. Moreover, buyers in developing countries are more fixated and sensitive to price of a product than quality of a product.

Carle, Axhausen and Wokaun studied the competitive forces in the fuel cell market using

Porter’s Five Forces. These researchers modified Porter’s Five Forces analytical method to include three additional competitive forces namely infrastructure and fuel, government policy and investments. The researchers found market penetration of fuel cell technology is heavily dependent on government subsidies and incentives. New untested technologies, have great difficulty in penetrating a market with deeply entrenched incumbents like the U.S. oil industry without U.S government backing.

Prescott and Grant evaluated 21competitive strategies including Porter’s Five Forces. Prescott and Grant found Porter’s Five Forces analytical method to be expensive for small business.

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Typically, data collection for Porter’s Five Forces research project costs $10,000 to $50,000 dollars. Both researchers advocated use of Case study, personal interviews and literature search to collect data for Porter’s Five Forces. Prescott and Grant also stated the accuracy of Porter’s

Five Forces is highly dependent upon the technical, interpersonal, conceptual, diagnostic and analytical skills of the analyst.

Key strength of Porter’s Five Forces analytical method described across the literature was the structured method of strategy formulation by countering competitive forces in a market space, and the repeatability of the method across different industries. The key weakness of Porter’s Five

Forces is the time and expense needed to collect data for the method, the need for regeneration and analysis of data after passage of time and the need for an expert analyst to make sense out of collected data.

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Description

Strategy analysts analyze the competitive forces, and formulate a competitive winning strategy in any industry using Porter’s Five Forces analytical method. An intelligence analyst can use

Porter's Five Forces analytical method to analyze strategic intelligence problems. U.S. intelligence analysts can use Porter’s Five Forces to analyze competitive market forces in

Chinese markets and formulate a winning strategy for U.S. companies to gain a foothold in

Chinese markets. Vice versa, U.S. analysts can study how Chinese and Indian companies are using Porter’s Five Forces analytical method to counter competitive forces in U.S. market to gain a foothold in the U.S. market space. Porter's Five Forces analytical method is a powerful tool for performing economic competitive analysis of foreign markets.

Michael Porter a Harvard Business School professor created Porter's Five Forces analytical method. Since the method’s publication, in Harvard Business Review 57, March – April 1979, pages 86-93, the method has become one of the most important business strategy tools. Porter's

Five forces analytical method is shown graphically in figure 1 and also outlined below.

Figure 1 Porter's Five Forces that shape industry competition



Threat of new entrants to an industry

New entrants into an industry start price wars, gain market share and bring disruptive technology into the industry.

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

The power of suppliers in an industry

Suppliers have power in an industry, if they supply unique product not found elsewhere.



The power of buyers in an industry

Buyers can be very powerful and companies typically have very low negotiating power against strong buyers. Strong buyers can also set prices and play one competitor against another competitor.



Threat of substitute Services/Products

Changes created in industry competitive structure by introduction of a substitute service/product.



Rivalry among existing competitors

Rivalry amongst competitors in a market space can affect profitability in the industry and make it unattractive for new entrants into the market space. Established competitors with highly successful examples of past performance can be very hard to dislodge.

The strength of the Porter's Five Forces analytical method is the structured manner in which it allows an analyst to analyze competitive market forces like buyer power, threat of new entrants, bargaining power of suppliers, threat of substitute products, and rivalry amongst existing competitors in an industry and then creating a winning strategy to counter those competitive market forces. After analyzing all the five competitive forces, the strategy analyst can keep the overall structure of the industry in mind instead of focusing on any one competitive force.

Porter's Five Forces analytical method helps in forecasting the competitive positions of a company in any industry. The weakness of Porter's Five Forces analytic method is that it is time consuming and costly to execute, making the method unfit for small enterprises. Additionally the strategy analyst can misuse the analytical method to undermine the industry structure, creating new types of competition, which will not allow any company to win in the industry. (Porter,

2008)

Sources

Porter, Michael, E. (2008). The Five Competitive Forces That Shape Strategy - Harvard

Business Review. (pg 79-93). Retrieved December 2, 2010, from http://hbr.org/2008/01/the-fivecompetitive-forces-that-shape-strategy/ar/pr

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Strengths and Weaknesses

Strengths

 Porter’s Five Forces can effectively analyze buyer power in an industry

Porter's Five Forces analytical method allows the analyst to analyze the buyer's market influence and power. Strong buyers have the ability to manipulate the industry and initiate price wars between industry players.

 Porter’s Five Forces can effectively analyze threat of new entrants in an industry

Porter's Five Forces analytical method allows the analyst to analyze the threat of new entrants in an industry. If barriers to entry are low for an industry, for example in internet banking, then every new company with a stellar idea can be successful in the industry.

Low barriers of entry can be bad for incumbent players in the market place and good for new companies wanting to enter the market place.



Porter ’s Five Forces can effectively analyze bargaining power of suppliers

Porter's Five Forces analytical method allows the analyst to analyze the bargaining power of suppliers. In cases like computer chip manufacturers who have rely heavily on silicon manufacturers, the suppliers can be very powerful and will use their power to sell products at above market rates.

 Porter’s Five Forces can effectively analyze threat of substitute products

Porter's Five Forces analytical method allows the analyst analyze the threat of substitute products. Different types of facial soaps sold in a supermarket in the $2 to $5 dollar range are prime examples of substitute products. The large number of facial soap choices creates a powerful competition amongst the soap producing companies. The only way such companies can be successful is via product differentiation and price competition .

 Porter’s Five Forces can effectively analyze rivalry amongst existing competitors

Porter's Five Forces analytical method allows the analyst to effectively analyzed rivalry existing amongst competitors. If there is strong rivalry amongst competitors for example between Intel Corporation and AMD Corporation, both producing computer-processing chips (CPU) for computers. The rivalry between incumbents in a market place can typically lead to price wars, which damage both competitors. Competitors normally follow certain rules allowing all competitors to have a market share in the industry. It is rare to see a sole incumbent in a market place, such a position in the market place is not viable for long, and usually a competitor comes along to upset the sole incumbent in the market place.



Po rter’s Five Forces uses structured approach

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Strategy analyst uses a structured approach to examine competitive forces affecting industries and formulate a winning strategy. The analyst then distributes the winning strategy to decision makers.

 Porter’s Five Forces is basis for additional in-depth analysis

Porter’s Five Forces analytical method provides additional information for an in-depth analysis.

Weaknesses

 Porter’s Five Forces can undermine industry structure

Strategy analyst can use Porter’s Five Forces method to undermine the industry structure, creating new types of competition, which do not allow any company to win in the industry.

 Porter’s Five Forces requires experienced analysts

Strategy analyst can mistake certain attributes of the industry as its underlying forces for example; government regulation is not a one of the Porter’s Five Forces in an industry but a factor influencing the Porter’s Five Forces.

 Porter’s Five Forces expensive and long lead-time

Porter’s Five Forces is expensive and takes a long time to execute and deliver results to the decision maker.

Sources

Porter, Michael, E. (2008). The Five Competitive Forces That Shape Strategy - Harvard Business

Review. (pg 79-93). Retrieved December 2, 2010, from http://hbr.org/2008/01/the-fivecompetitive-forces-that-shape-strategy/ar/pr

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How to u se Porter’s Five Forces analytical method

The seven-step concept map in figure 2 depicts how to apply Porter’s Five Forces analytical model to any strategic competitive intelligence problem. The analyst will use research tools like strategic business intelligence databases, open source internet research, interviews with industry experts, focus groups, market/consumer surveys and financial reports to gather competitive information about market forces. Examples of strategic business intelligence databases could be

LexisNexis, Dun & Bradstreet, Frost & Sullivan, Gartner, Global Insight, Stratfor, Eagle Eye and

Plunkett Research. Figure 2 shows a concept map of Porter's Five Forces analytical model.

Figure 2 Concept map of Porter's Five Forces analytical method

Porters Five Forces first step

Strategy analyst will analyze barriers to entry in an industry. Analyst will use research tools to collect data on sources of barriers to entry into an industry. Examples of barriers to entry in an industry are economics of scale, product differentiation, capital requirement and switching costs.

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Porter’s Five Forces second step

Analyst will analyze bargaining power of buyers in an industry. Analyze will use research tools to collect data on buyer’s influence and power in an industry. Analyst could examine buyer influence by looking at volumes purchased by the buyers, product differentiation and switching costs.

Porter’s Five Forces third step

Analyst will analyze bargaining power of suppliers in an industry. Analyst will use research tools to collect data on supplier’s influence and power in an industry. Analyst could examine supplier influence and power by checking the number of suppliers, lack of substitute products in the industry and how important is the supplier’s product to the buyer.

Porter’s Five Forces fourth step

Analyst will analyze threat of substitute products. Analyst will use research tools to collect data on threat of substitute products in the industry. Analyst can check for substitute products and their pricing in the industry.

Porter’s Five Forces fifth step

Analyst will analyze intensity of rivalry among existing competitors. Analyst will use research tools to collect data on intensity of rivalry amongst existing competitors. Analyst can examine if there is intense rivalry amongst existing competitors in the market. Intense competitor rivalry can trigger damaging price wars in the industry.

Porter’s Five Forces sixth step

Compile collected data on all five competitive market forces into Porter’s Five Forces framework shown in figure 2. Identify the most powerful and threatening competitive market force preventing your company from being successful in the market place. Formulate a competitive strategy to counter and defend against the most imminent market threat to your company. Distribute competitive strategy to decision makers.

Porter’s Five Forces seventh step

Identify industry opportunities using Porter's Five Forces framework. Distribute strategy and opportunity findings to decision makers.

Sources



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Personal Test Case

I applied Porter’s Five Forces analytical technique to find answers to my analytical question “

Is company TNISO in a position to win contracts for Open Source Intelligence services focusing on the Middle East and South East Asia with Central Command?

” I used the following three evaluation criteria to assess Porter's Five Forces analytical method:



Formulation of competitive business strategy: Formulate a competitive business strategy to win contracts in USCENTCOM market. This criterion has a weight of 50%.



Repeatability : Apply Porter's Five Forces analytical technique in other markets besides

USCENTCOM. This criterion has a weight of 25%.



Ease of use: How easy is it to create a potential winning business strategy using

Porter's Five Forces analytical technique? This criterion has a weight of 25%.

I believe Porter's Five Forces analytic technique is the most appropriate method to analyze and counter the competitive market forces in U.S. Central Command market. I then used Porter’s

Five Forces to produce a winning strategy on how to capture and defend a market segment in

USCENTCOM market for TNISO. The competitive forces and the winning strategy were then presented to the decision maker. The following seven steps previously described in “How-to” section will depict how I applied Porter’s Five Forces analytical method on my personal test case analytical question.

Porter’s Five Forces first step-Research and analyze barriers to entry in

USCENTCOM market place

I researched and analyzed barriers to entry into USCENTCOM market space using Booz Allen

Hamilton strategic business intelligence websites shown in figure 3. My research found barriers to entry in USCENTCOM market to be high. U.S. Government regulations stipulate provision of analytical support to USCENTCOM by U.S. based and U.S. owned companies with cleared personnel holding top secret/SCI clearance processed through Defense security services. Foreign owned or affiliated companies for example French or Israeli defense contracting companies with foreign employees cannot bid on USCENTCOM contracts. Even U.S. owned companies, which have hired foreign workers on H-1 work visa’s are ineligible for bidding on USCENTCOM contracts.

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Figure 3 Specialized databases used to perform literature search for Porter's Five Forces analytical method

Porter’s Five Forces second step-Research and analyze bargaining power of buyers in USCENTCOM market place

I researched and analyzed the bargaining power of U.S. Government in my personal case concerning USCENTCOM industry using Booz Allen Hamilton strategic business intelligence websites shown in Figure 3. My research found the bargaining power of the buyer i.e. U.S

Government to be very strong. I examined U.S. Government influence by looking at professional services purchased by the U.S. Government, differentiation in products and switching costs. US

Government has minimal switching cost; the U.S. Government can switch suppliers without any detrimental effects to its contracts. In my personal test case, the U.S. Government has very strict contracting regulations and service provision regulations.

Porte r’s Five Forces third step-Research bargaining power of suppliers in

USCENTCOM market place

Using Porter’s Five Forces I analyzed bargaining power of suppliers in an USCENTCOM industry using Booz Allen Hamilton strategic business intelligence websites shown in Figure 3. I found the bargaining power of suppliers to be very low in USCENTCOM industry. The U.S. government has full control on selection, and choice of professional services providers in the

USCENTCOM market place.

Porter’s Five Forces fourth step-Research and analyze threat of substitute products/services in USCENTCOM market place

I analyzed threat of substitute products in the USCENTCOM market using Booz Allen Hamilton strategic business intelligence websites shown in Figure 4. I researched and examined if there are substitute products in the industry, what were their pricing in the USCENTCOM market place.

In my research, I found the threat of substitute services in USCENTCOM to be high.

The source of

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the substitute services is other small business providing analytical support to USCENTCOM like

Strategic Solutions Unlimited , S4 Inc , The Masy group and Cambridge International Systems .

Figure 4 Eagle Eye a federal business intelligence tool used to collect data for substitute services.

Porte r’s Five Forces fifth step-Research and analyze intensity of rivalry amongst existing competitors

I analyzed the intensity of rivalry among existing competitors in the USCENTCOM industry using Booz Allen Hamilton strategic business intelligence websites shown in Figure 3. I researched and found the following four equally balanced primary incumbents (SRA international, Booz Allen Hamilton, SAIC, and CSC) in the USCENTCOM market. Due to intense competition amongst the four incumbents, there have been frequent damaging price wars on products/services provided to USCENTCOM. U.S Government has regulated the competition amongst incumbents, by discouraging sole biding by any one incumbent.

Figure 5 Centurion research solutions used to collect and analyzed rivalry amongst incumbents

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Porter’s Five Forces sixth step-Research and analyze all five forces together

I compiled all the five competitive forces into Porter’s Five Forces framework shown in figure

2, identified the most powerful, and threatening competitive market forces. The most powerful and imminent market threats preventing TNISO’s success in the USCENTCOM market place are the threat of substitute services from other small business owners and intense rivalry amongst four incumbents. I formulated a competitive strategy to counter the two imminent market threat shown above, by formulating a combination of price leadership, service differentiation, and teaming with all four incumbents in USCENTCOM market space.

Porter’s Five Forces seventh step-Identify opportunities in USCENTCOM market space

I identified the following opportunities in USCENTCOM market space using Porter's Five

Forces framework shown in figure 2.



TNISO provides embedded analytical support to supplement client analyst in theater.

Few firms are providing analysts who will deploy to theater.



TNISO provided favorable contracting terms by U.S. Government to compete with other incumbents in USCENTCOM market.



TNISO could form partnering agreements with big four incumbents and other competitors on all USCENTCOM contracts.



TNISO served well by high barriers of entry into USCENTCOM market place.

I used three criteria to evaluate the effectiveness of Porter’s Five Forces analytical method in my personal test case. The three criteria given below:

Formulation of competitive strategy criteria: Porter’s Five Forces analytical method has successfully fulfilled the formulation of competitive strategy criteria in my personal test case.

Porter Five Forces was used to formulate a winning strategy for TNISO to counter the competitive forces in USCENTCOM market.

Repeatability criteria: Porter’s Five Forces analytical method has successfully fulfilled the repeatability criterion in my personal test case. I was able to use Porter’s Five Forces repeatedly to re-analyze competitive forces in USCENTCOM market after certain market changes or passage of time.

Ease of use criteria: Porter’s Five Forces analytical method scored low in the ease of use criteria in my personal test case. Data collection and analysis of bargaining power of suppliers in

USCENTCOM industry is a complicated, time consuming and expensive task requiring use of experienced analysts and specialized expensive databases shown in table 1.

In conclusion, Porter’s Five Forces analytical method successful fulfilled the three evaluation criteria in my personal test case. Primary challenge in using Porter’s Five Forces was the long lead-time taken to collect, analyze and disseminate the competitive strategy to decision makers. I

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will not recommend use of Porter’s Five Forces for small companies with limited research budget and short to medium project time lines. To overcome the cost and long lead time challenge I have used Booz Allen Hamilton’s strategic business intelligence analytical research website and tools.

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For Further Information

Please consult the following resources given below for further information on Porter’s Five

Forces analytical technique.

Porter, Michael E. (1998). Competitive strategy: techniques for analyzing industries and competitors.

New York, New York: Free Press.



Porter, M., How Competitive Forces Shape Strategy. Harvard Business Review, March-April

(1979), p. 8.

Prescott, J. E., & Grant, J. H. (1988). A Manager's Guide for Evaluating Competitive Analysis

Techniques. Interfaces , 18(3), 10-22. Retrieved from EBSCO host .

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Annex 1. Detailed Literature Review

Given below are seven detailed literature reviews defining what is Porter’s Five Forces analytical technique and then providing examples of how Porter's Five Forces have been used to research competitive forces in a industry. After researching the competitive forces in an industry, the analyst formulates a winning strategy to gain a winning position in the market. The analysts frequently counter competitive market forces using price leadership and differentiation strategies.

The Five Competitive Forces That Shape Strategy



Name of Analytic Technique

Porter’s Five Forces

Purpose

The purpose of this article is to inform and advocate the use of Porter's Five Forces analytical technique in formulation of a competitive strategy. We create the competitive strategy formulated by analyzing the underlying five forces in an industry. In this article, the creator of

Porter’s Five Forces analytic technique economist and Harvard University professor Michael E.

Porter advocates and reaffirms the workings of the Porter’s Five Forces analytic technique.


Strengths:

1.

Analyzes bargaining power of buyers in a industry

2.

Analyzes threat of new entrants in a industry

3.

Analyzes bargaining power of suppliers

4.

Analyzes threat of substitute products

5.

Analyzes rivalry amongst existing competitors

6.

By considering all the five forces shown above, the strategy analyst can keep the overall structure of the industry in mind instead of focusing on any one force.

Weaknesses:

1.

Strategy analyst can use Porter’s Five Forces method to undermine the industry structure, creating new types of competition, which do not allow any company to win in the industry.

2.

Strategy analyst can mistake certain attributes of the industry as its underlying forces for example; government regulation is not a one of the Porter’s Five Forces in an industry but a factor influencing the Porter’s Five Forces.

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Description

Strategy analyst use’s Porter’s Five Forces analytical technique to create a competitive strategy that takes into account the competitive forces in the industry. The competitive strategy will help the company maintains its leadership in the industry and safeguard the company from attack by rival competitors. Porter’s five forces are threat of new players in the market, bargaining power of the suppliers, bargaining power of the buyers, threat of substitute services, and rivalry amongst existing competitors in the market place. Five steps for Porter’s Five Forces analytical method are given below .

1.

Threat of new entrants to an industry: New entrants into an industry start price wars, gain market share and bring disruptive technology into the industry. For example, Netflix an online movie rental company has gained market share from Blockbusters a chain of video/game rental outlets. If barriers to entry into an industry are high, it becomes very difficult for new entrants to gain market share. Government policy is a major barrier to entry into certain intelligence markets solely served by U.S. companies with U.S citizen employees. A small company providing open source intelligence services to the U.S. Central

Command market space will need to examine the barriers of entry into market.

2.

The power of suppliers in an industry: A professional services company treats its employees as input. The employees or suppliers for U.S. Central Command typically have to be U.S. citizens with high-grade security clearances. Such a small pool of input to a company can put pressure on the company to be competitive in an industry.

3.

The power of buyers in an industry: U.S. Central Command or U.S. government is a very powerful buyer in the defense contracting industry. Companies typically have very low negotiating power with such strong buyer. Strong buyers can also set prices and play one competitor against another competitor.

4.

Threat of substitute Services/Products: The introduction of a substitute service/product strongly affects industry structure. For example, small women owned business Alaska based business employing in contract un-cleared employees in theater supplying open source intelligence to U.S. Central Command could take away market share from U.S. based company with cleared employees.

5.

Rivalry among existing competitors: Rivalry amongst competitors in U.S. Central Command market space can affect profitability in the industry and make it unattractive for new entrants into the market space. Established competitors with highly successful examples of past performance can be very hard to dislodge. Examples are defense contractors who are prime contractors on U.S. Central Command contracts.

Steps to create a competitive strategy:

 Analyze supplier bargaining power in U.S. Central Command market space.

 Analyze buyer bargaining power in U.S. Central Command market space.

 Analyze threat of new entrants in U.S. Central Command market space.

 Analyze threats of substitutes in U.S. Central Command market space.

 Analyze rivalry amongst competitors in U.S. Central Command market space.

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The strategy analyst will analyze all the five forces in the industry by performing market research, talking to suppliers, buyers, examining substitute services/products and looking at competitive analysis of incumbents in the industry.

Uses

Analysts can apply Porter’s Five Forces analytical technique to create a competitive strategy in virtually any industry. We create a competitive strategy after performing analysis of the five competitive forces driving market competition in any industry.

Comparison

Comparison is not required as this is the first source critique.

Sources Cited

The author has listed the following sources given below. Adam M. Brandenburger and Barry J.

Nalebuff, Co-opetition (Currency Doubleday, 1996 Michael E. Porter, Competitive Advantage:

Creating and Sustaining Superior Performance (The Free Press, 1998) Michael E. Porter,

“Strategy and the Internet” (HBR, March 2001).

Most Informative

The most informative item of this source is the detailed explanation of what is Porter's Five

Forces analytical method, how can it be applied to formulate a competitive strategy in any industry, what are the pitfalls to avoid and benefits of using this method.

Source Author

Michael E. Porter is the author of this article. Mr. Porter is also the creator of the Porter’s Five

Forces analytic method. Mr. Porter is very qualified to talk objectively about this analytic method as he has created this method and used it extensively in various industries.

Source Reliability

Dax Norman’s trust evaluation worksheet is not used to check the source reliability, as this is not an online web source, but an article written by the creator of the Porter’ Five Forces analytical technique.

Critique Author

Fuad Khan fuadkhan@yahoo.com

Mercyhurst College

Erie PA

Advanced Analytic Techniques Course

12/19/2010.

Link to my wiki : http://intel520.wikispaces.com/

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Use of Leadership and Differentiation Strategies by Professional Service

Firms: A Case Study

Wei-Ming, O., & Kang-Wei, C. (2007). Use of Leadership and Differentiation Strategies by

Professional Service Firms: A Case Study. International Journal of Management , 24 (3), 477-

488. Retrieved from Business Source Elite database.


Porter's Five Forces

Purpose

The purpose of the case study is to study the strategic positioning of a transportation engineering services firm in the Taiwanese public sector market space.


The strategic researchers Wei-Ming and Kang-Wei did not list any strength or weakness of the

Porter's Five Forces analytical method in their case study.

Description

Strategic researchers Wei-Ming and Kang-Wei obtained a comprehensive understanding of competitive market forces affecting professional transportation engineering firm in the

Taiwanese public sector market space using the Porter's Five Forces analytical method.

Uses

This case study demonstrates that Porters Five Forces is used to analyze competitive market forces influencing the transportation industry.

Comparison

The strategic researchers Wei-Ming and Kang-Wei used Porter’s Five Forces in their case study of analyzing the market forces in Taiwanese transportation engineering industry. The first source critique article found at Porter, Michael, E. (2008). The Five Competitive Forces That Shape

Strategy - Harvard Business Review. (pg 79-93). Retrieved December 2, 2010, from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/pr . Described how to use the Porter's Five Forces analytical technique by the technique's author.


The case study provided eight points very informative points given below:



Cost leadership is essential for professional services firms selling to strong buyers.



Service differentiation is very important for professional services firm, in order for them to stand out from the crowd.



New professional services firms usually lack experience and human capital to bid for large projects. They may need sub-prime partners in a contract.

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

Professional services firms impacted by competitor rivalry. Competitor use price reduction, service enhancement and social networks to win contracts.



The powerful buyer is the single most important threat to a professional transportation engineering services firm in Taiwanese public sector market.



Results compiled by strategic researchers Wei-Ming and Kang-Wei can be re-used by other strategy analysts in other professional transportation engineering services firms in other countries and markets.



Porter's Five Forces methodology takes a time to research market forces and is not viable for very short lead-time projects.



Porter's Five Forces methodology is more useful on strategic level and normally not used at a tactical level.

Source Author

The two authors of this case study are strategic researchers Wei-Ming and Kang-Wei who have performed an in-depth strategic analysis of a professional transportation-engineering firm located in Taiwan. The strategic researchers have used both the SWOT and Porter's Five Forces methodology to formulate recommendations for professional transportation engineering services firms.


The source rated to have high credibility according to Dax Norman trust scale.

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India, Information Systems Management , 21(3), 34-40.

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94.

21

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University, Evanston, IL.

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Control (8th ed,) New York: Irwin McGraw-Hill.

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137-145.

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Competitors , New York: The Free Press.

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New York: The Free Press.

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23(2), 105-117.

Siaw, I., & Yu, A. (2004). An analysis of the impact of the internet on competition in the banking industry: Using Porter's five forces model. International Journal of Management , 21(4),

514-523.

22

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85-99.

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Management and Entrepreneurship , 7(4), 108-126.

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Theory and Practice , 9(2), 54-69.

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Critique Author


Mercyhurst College

Erie PA


01/06/2011

Link to my wiki: http://intel520.wikispaces.com/

23

An Analysis of the Impact of the Internet on Competition in the Banking

Industry, using Porter's Five Forces Model

Siaw, I., & Yu, A. (2004). An Analysis of the Impact of the Internet on Competition in the

Banking Industry, using Porter's Five Forces Model. International Journal of Management ,

21 (4), 514-523. Retrieved from Business Source Elite database.



Purpose

Academic researchers Irene Siaw and Alec Yu wrote a paper on the emergence of the internet on the competitive landscape of the banking industry. Both researchers advocate harnessing the power of the internet in the banking industry.


Academic researchers Irene Siaw and Alec Yu did not discuss the strengths and weaknesses of the Porter's Five Forces analytical model.

Description

Academic researchers Irene Siaw and Alec Yu studied how the internet was affecting competitive dynamics of banking industry using the Porter's Five Forces analytical method.

Uses

This paper demonstrates that Porters Five Forces is used to analyze the market forces influencing the internet banking industry.

Comparison

This paper is similar in methodology to the used by strategic researchers Wei-Ming and Kang-

Wei (Wei-Ming, O., & Kang-Wei, C. (2007). Use of Leadership and Differentiation Strategies by Professional Service Firms: A Case Study. International Journal of Management , 24 (3), 477-

488. Retrieved from Business Source Elite database.). The authors of both papers have practically applied Porter's Five Forces to study the competitive forces present in Taiwanese professional services industry and the banking industry. Both the papers present clear instructions on how to apply Porter's Five Forces analytical technique.


I found the following three items most informative in this paper, which I can also use, in my final project.



Porter's Five Forces analytical method can also be used in dynamic evolving industries to formulate a competitive strategy. Using Porter's Five Forces the academic researchers

24

Irene Siaw and Alec Yu advocated the use of internet banking long before it became a successful and widely used technology.



Internet has lowered the barriers of entry in most industries. The internet has provided direct access to customers and a more economical alternative distribution channel



Product differentiation is very important otherwise, it is easy for the buyer to switch products. This fact is also reinforced by article by strategic researchers Wei-Ming and

Kang-Wei (Wei-Ming, O., & Kang-Wei, C. (2007). Use of Leadership and

Differentiation Strategies by Professional Service Firms: A Case Study.

International

Journal of Management , 24 (3), 477-488. Retrieved from Business Source Elite database.).

Source Author

Academic researchers Irene Siaw and Alec Yu are the authors of this paper. Irene Siaw is an academic researcher and Alec Yu works as head of Cisco Systems Wireless division Hong Kong.

Alec Yu as a Cisco Systems executive a company whose routers power the internet is in a unique position to study the impact of the internet on competitive landscape of the banking industry.



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Perspective, Orlando, FL: The Dryden Press, 2000

Critique Author


Mercyhurst College

Erie PA


01/15/2011


26

Mobile E-Commerce outlook

Yeo, J., & Huang, W. (2003). Mobile E-Commerce Outlook. International Journal of

Information Technology & Decision Making , 2 (2), 313. Retrieved from Academic Search

Complete database.



Purpose

Academic researchers Julia Yeo and Wayne Huang wrote a paper to identify and explore potential business models in the mobile commerce industry using Porter's Five Forces analytical model.


Two strengths of the Porter's Five Forces analytical model mentioned by the academic researchers Julia Yeo and Wayne Huang. One the Porter's Five Forces analytical model provided a complete evaluation of the mobile commerce industry. Secondly, the Porter's Five Forces analytical model helped forecast areas of mobile commerce industry suitable for investment by firms seeking to gain a market share of the mobile commerce industry. The academic researchers did not discuss any weakness of the Porter's Five Forces model.

Description

Academic researchers Julia Yeo and Wayne Huang used Porter's Five Forces method to look at competitive market forces present in the mobile commerce industry. The academic researchers also used Porter's Five Forces to formulate a competitive strategy to gain a market share in the mobile commerce industry.

Uses

This paper demonstrates that Porter's Five Forces analytical method used to analyze the market forces influencing the mobile commerce industry.

Comparison

There is an interesting similarity between this paper and the study performed by strategic researchers Wei-Ming and Kang-Wei (Wei-Ming, O., & Kang-Wei, C. (2007). Use of

Leadership and Differentiation Strategies by Professional Service Firms: A Case Study.

International Journal of Management , 24 (3), 477-488. Retrieved from Business Source Elite database.) Both the researchers used strength, weakness, opportunities, threats (SWOT) model in conjunction with the Porter's Five Forces analytical method. Julia and Wayne used the Porter's

Five Forces analytical method to research the threats for their SWOT model.


Three informative takeaways from this paper are given below:

27



Brand names can be significant barrier to entry into an industry. It is very hard to capture market share from established industry players with established brand name.



There is a grave almost fatal impact to a business if we create in-correctly identify the wrong competitive forces in the industry and use those in Porter's Five Forces analytical model. As the academic authors in the paper, stated the mobile commerce industry should not duplicate the competitive forces existing in electronic commerce industry. Instead, the researchers should find key differentiators like location awareness, which makes mobile commerce industry radically different from electronic commerce industry.



The paper also points to lack of data from other mobile operators in other countries to get a more diverse view and different of global mobile commerce industry. This is a very important observation, as mobile industry has leapfrogged over traditional landline internet in third world countries where landline internet is too expensive to install due to both monetary reasons and geographic reasons. In most African countries, mobile commerce like banking and money transfer is performed via cell phones. In Afghanistan, most government employees are paid monthly via cell phones. Mobile commerce will also expand with revolutionary devices like Apple Ipad, which allow a bigger screen and more features useful for mobile commerce.

Source Author

Academic researchers Julia Yeo and Wayne Huang are the authors of this paper. Julia Yeo is an academic student at The University of New South Wales, Australia. In addition, Wayne Huang is an academic student at Ohio University, USA.



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28

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28

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Critique Author


Mercyhurst College

Erie PA


01/22/2011


30

Business strategy

Parthasarathy, S. (2010). BUSINESS STRATEGY. Financial Management (14719185) , 32-33.

Retrieved from Business Source Elite database.



Purpose

Academic researcher Sritkant Parthasarathy wrote a paper to inform the readers about the competitive forces in Indian business industry using Porter’s Five Forces analytical methodology.


The author in his paper did not discuss strengths and weakness of Porter's Five Forces analytical method.

Description

Academic researcher Sritkant Parthasarathy used Porter's Five Forces method to look at competitive market forces present in the Indian business industry

Uses

This paper demonstrates that Porter's Five Forces analytical method is used to analyze the market forces influencing the Indian business industry.

Comparison

Current article (Parthasarathy, S. (2010). BUSINESS STRATEGY. Financial Management

(14719185) , 32-33. Retrieved from Business Source Elite database) is different from the study performed by strategic researchers Wei-Ming and Kang-Wei (Wei-Ming, O., & Kang-Wei, C.

(2007). Academic researcher Srikant Parthasarathy is performing a country analysis of India.

Whereas Wei-Ming and Kang-Wei are performing a professional services sector analysis in

Taiwan.

Sources Cited

The academic researcher has not provided any sources for his article. The academic researcher

Sritkant Parthasarathy has published original work in a peer reviewed journal financial management. I evaluated the author's source reliability and high validity (39.5) based on the Dax

Norman's trust evaluation scale

.


Four informative takeaways from this article were as given below:



State protectionism and lack of infrastructure could be barriers to entry into an industry.

31



Suppliers in developing countries could pressure on the incumbents by providing low quality products, delivered quickly. Opposed to developed countries where suppliers are all producing high quality products.



Buyers are fixated more on price than quality in developing countries.



Competition amongst competitors is virtual than real in developing countries. Incumbents have a strangle hold on the market and are almost impossible to remove. Competition is also tiered and is most intense at the lowest levels, and there is almost an absence of competition at the top.

Source Author

Academic researcher Sritkant Parthasarathy is head of Chakra Consulting and visiting professor of strategy at Christ University.


The source rated to have high credibility according to Dax Norman trust scale. Trust scale = 39.5

Critique Author


Mercyhurst College

Erie PA


01/29/2011


32

Opportunities and Risks during the Introduction of Fuel Cell Cars

Carle, G., Axhausen, K. W., Wokaun, A., & Keller, P. (2005). Opportunities and Risks during the Introduction of Fuel Cell Cars. Transport Reviews , 25(6), 739-760.



Purpose

Academic researchers Gian, K.W, Alexander and Peter wrote a paper to inform the readers about the competitive forces in the fuel cell industry using Porter's Five Forces analytical model.


Academic researchers Gian, K.W, Alexander and Peter did not discuss strengths and weaknesses of Porter's Five Forces analytical method.

Description

Academic researchers Gian, K.W, Alexander and Peter used Porter's Five Forces analytical method to look at market direction and competitive market forces present in the fuel cell industry. At the time, this paper was written it was impossible to perform a complete and precise competition analysis for fuel cell technology because fuel cells were not available as an assembly line product for the vehicle market.

Uses

This paper demonstrates that Porter's Five Forces analytical method can be used to analyze the direction and competitive market forces influencing the fuel cell industry.

Comparison

Academic researchers Gian, K.W, Alexander and Peter used Porter's Five Forces analytical method to find market direction and competitive market forces of a non-commercially available product the fuel cell . This is different from the Yeo, J., & Huang, W. (2003). (Mobile E-

Commerce Outlook. International Journal of Information Technology & Decision Making , 2 (2),

313. Retrieved from Academic Search Complete database.) Paper where Porter's Five Forces is used to find the competitive forces of an existing E-commerce market place.


Four informative points in the paper are given below:



Authors modified Porter's Five Forces analytical method for the fuel cell industry by adding three additional forces, infrastructure and fuel, government policy and investments. The fuel cell industry requires a new fuel i.e. hydrogen and fuel distribution network different from the existing gasoline distribution network. Clear government policies are needed for successful market penetration of fuel cell technology. Lastly considerable financial investment is needed for the adoption of this early phase of R&D

33



Fuel cell is unproven technology hence it has strong competition from substitute technology like natural gas, gasoline and gasoline-electric hybrid technologies.



Market penetration of fuel cell technology is heavily dependent on government incentives and subsidies. This means new technologies, which do not have government backing, might have a very tough time penetration a market with deeply entrenched incumbents like the U.S. oil industry.



It will be a new paradigm where auto manufacturers are the suppliers of both the vehicle and the fuel. Unlike the existing paradigm where the auto manufacturers are only manufacturing the vehicle and the oil is which is essential for the vehicle is supplied by a powerful supplier.

Source Author

Academic researchers Gian, K.W, Alexander and Peter have performed detailed research on the fuel cell industry. Gian and K.W Alexander work for Institute for Transport Planning and

Systems (IVT) is part of the Swiss Federal Institute of Technology (ETHZ) in Zurich

Switzerland. Moreover, Peter works for Paul Scherrer Institute, PSI, is the largest research center for natural and engineering sciences within Switzerland.



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R&D

(2003) Well-to-Wheels Analysis of Future Automotive Fuels and Powertrains in the European

Context

(Brussels: EU Commission’s Joint Research Centre).

Total (2004) Sharing Our Energies—Corporate Social Responsibility Report 2003 (Paris: Total).

Tsuchiya, H. and Kobayashi, O. (2004) Mass production cost of PEM fuel cell by learning curve,

International Journal of Hydrogen Energy, 29(10), p. 985.

US Department of Energy Efficiency and Renewable Energy (2003) President’s hydrogen initiative: a clean and secure energy future.

Available at: http://www.eere.energy.gov/hydrogenandfuelcells/ presidents_initiative.html

(Department of Energy Efficiency and Renewable Energy).

US Department of Energy (2004) Technology Snapshot Featuring the Toyota Prius

(Washington, DC: US DoE).

UTC Fuel Cells (2004) Transportation. Available at: http://www.utcfuelcells.com/transportation/ index.shtm

Van den Hoed, R. (2004) Driving Fuel Cell Vehicles—How Established Industries React to

Radical Change (Delft: TU Delft).Verband der Automobilindustrie e.V. (2002) Alternative

Antriebssssteme.

Available at: http:// www.vda.de/de/service/jahresbericht/auto2002/auto+umwelt/u_27.html

Weiss, M. A., Heywood, J. B., Drake, E. M., Schafer, A. and AuYeung, F. F. (2000) On the

Road in 2020: A Life-Cycle Analysis of New Automobile Technologies (Boston, MA: Laboratory for Energy and the Environment, MIT).

38

Wengel, J. and Schirrmeister, E. (2001) Innovationsprozess vom Verbrennungsmotor zur

Brennstoffzelle, Chancen und Risiken für die badenwürttembergische Industrie (Karlsruhe:

Frauenhofer Institut für Systemtechnik und Innovationsforschung).

Wokaun, A., Baltensperger, U., Boulouchos, K., Gassmann, F., Hoffelner, W., Jansohn, P.,

Palumbo, R., Scherer, G., Steinfeld, A. and Stucki, S. (2004) The Role of Hydrogen in a Future

Sustainable Energy System, Executive Summary of a Seminar Series Held at PSI During the

First Semester 2004 (Villigen: Paul Scherrer Institut).

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Sustainable Mobility (Zurich: ETH).

World Business Council for Sustainable Development (2001) Sustainable Mobility Project,

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Critique Author


Mercyhurst College

Erie PA


02/04/2011


39

A Manager's Guide for Evaluating Competitive Analysis Techniques

Prescott, J. E., & Grant, J. H. (1988). A Manager's Guide for Evaluating Competitive Analysis

Techniques. Interfaces , 18(3), 10-22. Retrieved from EBSCO host .



Purpose

The purpose of the paper is to inform busy analysts about strengths and weaknesses of 21 competitive analytical Porter’s Five Forces analytical techniques along a set of 11 dimensions.

Strengths and Weaknesses of Porter's Five Forces

Strengths:

1. Structured approach to examining industries

2. Identifies competitors

3. Basis for other in-depth analysis

Weaknesses:

1. Basic assumption that economic structure of the industry is the root of competition

2. Helps drawing industry boundaries.

3. Long time needed to execute this analytical technique. Execute phase involves collection of data, analysis and dissemination of the findings to the appropriate individuals.

4. Cost to implement Porter's Five Forces analytical method is starting from $10,000 to $50,000, which is expensive for small companies

Description of Porter's Five Forces Analytical Method

Academic researchers John E. Prescott and John H. Grant present systematically how to use Porter's Five Forces Analytical method.



Time to implement Porter's Five Forces analytical method can be divided into two states.

Development i.e. specifying objectives of what we want to measure and any other constraints. Secondly execution phase which involves collection of data, analysis of data and dissemination of data.



Data collection for Porter's Five Forces analytical method is performed using one or all three methods i.e. case study, personal interviews and literature search.



Data for Porter' Five Forces is off the shelf, but needs further analysis by analysts to make sense of the data. Data for Porter's Five Forces is used to address current and future needs.



Accuracy of Porter's Five Forces is dependent upon the technical, interpersonal conceptual, diagnostic and analytic skills of the analyst.



Analyst will have to frequently update and challenge new data in the Porter's Five Forces model as competitive forces change in the industry.

40

Uses

Porter's Five Forces analytical method is a structured approach to examining competitive forces in industries, identifying competitors in a particular industry. The method can be used as basis for more in-depth analysis by the strategy analyst. Data collection for the Porter's Five Forces is performed using research tools, personal interviews and case study. It takes a long time to execute Porter's Five Forces analytical method.

Comparison

Prescott and Grant’s paper (Prescott, J. E., & Grant, J. H. (1988). A Manager's Guide for

Evaluating Competitive Analysis Techniques. Interfaces , 18(3), 10-22. Retrieved from

EBSCO host .) Provides a comparison of Porter's Five Forces against 20 analytical techniques.

Prescott and Grant's paper provides a measurement of Porter's Five Forces analytical techniques, whereas Carle, Axhausen, Wokaum's (Carle, G., Axhausen, K. W., Wokaun, A., & Keller, P.

(2005). Opportunities and Risks during the Introduction of Fuel Cell Cars. Transport Reviews ,

25(6), 739-760) paper depicts how Porter's Five Forces is used to research the competitive market forces in fuel cell industry.


The following two items in this paper were most informative.



Sources of data for implementing Porter's Five Forces analytical method is via case study, personal interviews and literature search.



Time taken for data collection, analysis and dissemination of information.

Source Author

Academic researchers John E. Prescott and John H. Grant are affiliated with Joseph M.Katz

Graduate School of business University of Pittsburg. Both the academic researchers have published this paper in a peer reviewed journal Strategic management.


Dax Norman trust scale rates the source to have high credibility.

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Critique Author


Mercyhurst College

Erie PA


01/22/2011


44

Annex 2: Analytic Question Test Case Data

Personal test case data collection

Analytic Question: Is company TNISO in a position to win contracts for Open Source Intelligence

services focusing on the Middle East and South East Asia with U.S. Central Command?

Table 1: Data Collection Tools

Name

In-Person interview

Focus Groups

Eagle Eye

Subject Matter Expertise

Interview with industry experts

Min 30 people focus group http://eagleeyeinc.com/

Plunkett Research

Epipeline

Centurion research solutions

Input Deltek

Information solutions http://www.plunkettresearchonline.com/ http://www.epipeline.com/ www.4centurion.com

http://www.input.com/default.cfm

Other comments

Expensive, lengthy data collection

Expensive, lengthy data collection

Expensive, provides critical market intelligence help vendors build strong, productive relationships with government buyers

Expensive , industry statistics, trends and in-depth analysis of top companies

Expensive government procurement marketplace's premiere "single pointof-access" to the best opportunity research, resources and capabilities.

Expensive , leading business intelligence and analytics company dedicated to helping our clients win government contracts.

Expensive, INPUT provides you with comprehensive, online market intelligence information and tools, coupled with personalized research and industry analysis, to help you find, strategize, bid, and win federal, state and local government business.

45

Data collection for bargaining power of buyer in USCENTCOM market space

Data

Data Date

(when it Source Name or Location

Estimated

Reliability of

Bargaining power happened)

01/12/2010 http://www.acq.osd.mil/dpa

Data/Source

High of the buyer, i.e.

U.S. CENTCOM is very high. Buyer has strict laws for p/pdi/eb/index.html

Credibility every facet of the buying process.

TNISO small business status helps in

USCENTCOM market

TNISO minority owned business status helps counter U.S.

Government bargaining power in USCENTCOM market

TNISO Alaska based business status counter’s

U.S. Government bargaining power in USCENTCOM market

01/13/2010 http://www.acq.osd.mil/dpa p/pdi/eb/index.html

01/14/2010 http://www.mbda.gov/

01/16/2010 http://www.nativeco tractors.org/

High

Credibility

High

Credibility

Medium

Credibility

Other Comments

This source provides contractual requirements of U.S.

CENTCOM contracts.

Source is used to research U.S.

CENTCOM buyer influence.

DPAP is responsible for all acquisition and procurement policy matters in the

Department of

Defense (DoD).

The Minority Business

Development Agency

(MBDA) is part of the

U.S. Department of

Commerce . MBDA is the only federal agency created specifically to foster the establishment and growth of minorityowned businesses in

America.

The Native American

Contractors

Associations (NACAs) mission is to enhance self-determination through preservation and enhancement of government contracting participation based on the unique relationship

46

TNISO disabled veteran owned business status provides competitive edge in USCENTCOM market

TNISO women owned business status provides a competitive edge in USCENTCOM market

01/20/2010 http://www.dm.usda.gov/sm allbus/

01/21/2010 http://www.sba.gov/aboutoffices-content/1/2895

High

Credibility

High

Credibility territories.

Table 2: Data collection for bargaining power of buyer in USCENTCOM market space between Native

Americans and the federal government.

SDA's Office of Small and Disadvantaged

Business Utilization

(OSDBU) was established June 26,

1979 pursuant to

Public Law (P.L.) 95-

507, which assigned it the task of fostering the use of small, disadvantaged and women-owned businesses as federal contractors.

The Office of Women’s

Business Ownership's mission is to establish and oversee a network of Women’s Business

Centers (WBCs) throughout the United

States and its

47

Data collection for threat of substitute services in USCENTCOM market space

Data

Data Date


Estimated

Reliability of

Threat of happened)

04/11/2010 https://www.fbo.gov/index?

Data/Source

High

Other Comments

This source provides a

Credibility substitute services is high. Other small business i.e. Strategic s=agency&mode=form&id=

471ffe0b2854cc0ffba7b5eff

3df3916&tab=notices&tabm ode=list&subtab=list&subta single point-of-entry for

U.S. government procurement opportunities over bmode=list&pp=30 Solutions

Unlimited

S4 Inc,The Masy group and

Cambridge

International

Systems are providing analytical support to USCENTCOM

$25,000. Registered companies can research if U.S.

CENTCOM is procuring substitute services.

Threat of substitute services is high. Substitute analytical support is provided by

Strategic Solutions unlimited

04/13/2010 http://www.strategicsolution

sunlimited.com/contracts.ph

p

High

Credibility

The SIA ID/IQ is a contract vehicle available to the

Defense Intelligence

Agency (DIA) through a partnership with

CACI. This program has a total estimated ceiling value of $1 billion over a five-year task order contract.

The SIA program will provide the

Department of

Defense (DoD)

Intelligence

Community with a responsive, efficient, and reliable means to satisfy requirements for intelligence analysis and related

48

Threat of substitute services is high. Substitute analytical support is provided by S4

Inc.

Threat of substitute services is high. Substitute analytical support is provided by the

MASY group

Threat of substitute services is high. Substitute analytical support is provided by the

MASY group

Threat of substitute services is high. Substitute analytical support is provided by

Cambridge

International

Systems

04/11/2010 http://www.s4inc.com/contr act_vehicles.html

04/11/2010 http://www.masygroup.com/ security/

04/11/2010 http://www.masygroup.com/ security/

04/11/2010 http://www.cbridgeinc.com/i ntelligence-security.html

High

Credibility

High

Credibility

High

Credibility

High

Credibility services.

Teaming up with SRA

International to provides intelligence analysis support

To support dynamic

National Security challenges, TMG provides innovative intelligence solutions, using high level consulting approaches and specialized outsourcing.

Discretion, confidentiality and security are hallmarks of our customer interaction. We serve the world's best government and corporate organizations.

Cambridge is committed to developing intelligence solutions that are tailored to a specific threat. We offer support during all phases of intelligence planning and operations.

Table 3: Data collection for threat of substitute services in USCENTCOM market space

49

Data collection for rivalry amongst existing competitors in USCENTCOM market space

Data

Data Date


Estimated

Reliability of Other Comments

Rivalry amongst happened)

04/13/2010 www.4centurion.com

Data/Source

High This source provides

Credibility existing competitors is high. There are incumbent key competitor intelligence for U.S.

CENTCOM market place. competitors like

Booz Allen,

SAIC,CSC, SRA providing analytical support to U.S.

CENTCOM

Rivalry amongst High

Credibility existing competitors is high.SRA international strengthened its command, control, communications & intelligence (C3I) division with acquisition of

RABA

Technologies in

Oct 2006

Rivalry amongst existing competitors is high. SRA awarded

USCENTCOM contract to provide intelligence planning and mission support for military

04/13/2010 http://www.sra.com/news/pr essreleases/phoenix.zhtml?c=

131092&p=irolnewsArticle&ID=912256&hi ghlight =

04/14/2010 http://www.sra.com/news/pr essreleases/phoenix.zhtml?c=

131092&p=irolnewsArticle&ID=1045434& highlight =

High

Credibility

RABA is a recognized leader in software development, systems integration and operational support for intelligence agencies.

U.S. Central

Command Awards

$21.8M intelligence contract to SRA

50

operations.

Rivalry amongst existing competitors is high.CSC ESI intelligence group provides variety of intelligence services to U.S.

Government

Rivalry amongst existing competitors is high. SAIC received $102 million prime contract from U.S.

CENTCOM

04/15/2010 http://www.allbusiness.com/ government/governmentbodies-officesgovernment/14831441-

1.html

http://wn.com/SAIC_Flat_D espite_Winning_102_Millio n_Contract_With_US_Centr al_Command_in_Kuwait

High

Credibility

High

Credibility

The IDIQ contract, awarded during CSC's fiscal 2011 first quarter, has a fiveyear period of performance and an estimated total value of $ 1 billion for all firms.

SAIC received a prime contract by the 1st

Theater Sustainment

Command to provide logistics service in support its activities throughout the US

Central Command area of responsibility.

SAIC awarded $14 M to Support the 513th military intelligence brigade

SAIC received $14 million intelligence contract from U.S.

CENTCOM http://www.asdnews.com/n ews/31862/SAIC_Awarded

_$14_M_to_Support_the_5

13th_Military_Intelligence_

Brigade.htm

High

Credibility

Table 4: Data collection for rivalry amongst existing competitors in USCENTCOM market space

51

Data collection for barriers to entry into USCENTCOM market space

Data Date Estimated

Data

(when it happened)

Source Name or Location Reliability of

Data/Source

Other Comments

Barriers to entry in

USCENTCOM market to be high.

Only U.S. based and U.S. owned companies with cleared personnel with top secret/SCI clearance could provide analytical support to

USCENTCOM.

Barriers to entry are high due to need for appropriate cleared staff processed through defense security services

05/4/2010 www.epipeline.com

High

Credibility

This source provides unique market intelligence to identify new entrants in the

U.S. CENTCOM market space. http://www.dss.mil/ High

Credibility

SS supports national security and the warfighter, secures the nation's technological base, and oversees the protection of US and foreign classified information in the hands of industry.

Table 5: Data collection for barriers to entry into USCENTCOM market space

52

Data collection for suppliers bargaining power in USCENTCOM market space

Data Date Estimated

Data

(when it happened)

Source Name or Location Reliability of

Data/Source

Other Comments

Bargaining power of suppliers is low.

Companies are able attract qualified intelligence analysts from the labor market.

Bargaining power of the supplier is low. Suppliers are heavily regulated by U.S.

Government contracting regulations.

Low bargaining power of suppliers is countered by forming teaming agreements with other companies.

04/01/2010

01/12/2010

01/13/2010 http://www.intelligencecare

ers.com/ http://www.acq.osd.mil/dpa p/pdi/eb/index.html

http://www.waterfrontsolicit

ors.com/outsourcing-andprocurement/legalbasics1/prime-contractorssub-contractors-andteaming-agreements

Medium

Credibility

High

Credibility

Medium

Credibility

This source provides research information for recruitment trends of intelligence analysts in U.S. CENTCOM market place.

This source provides contractual requirements of U.S.

CENTCOM contracts.

Source is used to research U.S.

CENTCOM buyer influence.

Very often teaming up will be essential, when customers have prepared a tender covering their requirements and expect the bidder to meet those requirements in full.

Companies like

Venatore form teaming agreements on

USCENTCOM agreements

01/14/2010 http://www.venatore.com/ne ws-detail.aspx?id=4

Medium

Credibility

Services will be provided as a subcontractor to

Science Applications

International

Corporation (SAIC) under the General

Services

Administration (GSA)

Millennia contract, for a one-year base period of performance

53

and four one-year option periods.

Table 6: Data collection for suppliers bargaining power in USCENTCOM market space

Estimated reliability has been calculated by using Dax Norman trust scale located at http://daxrnorman.googlepages.com/WebSitesYouCanTrust-Oct08.pdf

© Dax R. Norman, 2001.

Unlimited personal or education use authorized with this statement. The scale for Dax Norman trust scale is shown below;

46.75= Very High Credibility

40.00= High Credibility

35.06= Medium Credibility

21.00= Low Credibility

7.46= Not Credible

54

Porter`s Five Forces - Intel520-F. Khan

Porter’s Five Forces

Purpose

Strengths and Weaknesses

How to u se Porter’s Five Forces analytical method

Personal Test Case

For Further Information

Annex 1. Detailed Literature Review

Use of Leadership and Differentiation Strategies by Professional Service

Firms: A Case Study

An Analysis of the Impact of the Internet on Competition in the Banking

Industry, using Porter's Five Forces Model

Mobile E-Commerce outlook

Business strategy

Opportunities and Risks during the Introduction of Fuel Cell Cars

A Manager's Guide for Evaluating Competitive Analysis Techniques

Annex 2: Analytic Question Test Case Data

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