Choosing the right strategy has always been the key to success no matter whether we are talking about our private or business lives. In business, choosing the right strategy leads to competitiveness and then to the desired outcomes: excellent business results, satisfied customers and employees, financial success and growth. If competition is properly managed, it is a force that can bring out the best not only in companies but in national economies as well. There are a lot of important business terms connected to this area: competitive edge, the three strategies which determine the chances of profitability for a business: cost leadership strategy, differentiation and focus strategy. If chosen properly, these strategies will help a firm to leverage its strengths and protect itself against the adverse effects of the five forces that affect competitive power in an industry: supplier power, buyer power, competitive rivalry, threat of substitution and threat of new entry.
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Complete the sentences below with the names of five forces that affect competition:
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Power of companies that supply you with raw materials: S____ power
- The power of customers to decrease your prices: B____ power
- The strength of competition in the industry: C_ R_
- The extent to which a competitor’s products and services can be used in place of your own: T_ of S_
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The ease with which new competitors can enter the market: The T_ of new E_.
