Two Factors Affecting Business Profitability

Business profitability can be affected by the following two factors as noted by Porter:

a.  Industry structure and competition within the industry: Porter used the Five Forces model; (Threats from potential entrants, Threats from substitute, Suppliers’ bargaining power, Customers’ bargaining power, Competitive rivalry) to explain the factors affecting competition.

b.  At the level of the individual company, achieving a sustainable competitive advantage.

Sustainable competitive advantage is achieved by creating value for customers.

SWOT Analysis: Interpretation and possible problems

Strength, Weaknesses, Opportunities and Threats (SWOT) analysis is the identification of opportunities and threats in the environment.

It is also used to identify strengths and weaknesses in the resources, competences and capabilities of the entity.

An initial SWOT analysis is simply a list of strengths, weaknesses, opportunities and threats. Continue reading SWOT Analysis: Interpretation and possible problems

Tips On How To Use Value Chain Analysis For Business

Value relates to the benefits that a customer obtains from a product or service.

The value chain model is another useful model for business strategy analysis.

It can be argued that in business, the most important objective for success should be to add value better than competitors. Continue reading Tips On How To Use Value Chain Analysis For Business