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时间:2014-09-22 17:45来源:www.ukassignment.org 编辑:felicia 点击:

1.0 前言



2.0 关于宝洁的概况(Procter & Gamble)

宝洁(Procter & Gamble)是一个美国的日常产品制造商,也是世界上最大的日常产品的企业之一。宝洁(Procter & Gamble)成立于1837年,现在遍及世界各地,共有110000多名员工。P & G享有很高的声誉,在日常产品领域获得非常高的市场份额。主要经营洗发水、护发素、皮肤护理、化妆品、婴儿护理产品、妇女卫生用品、医药、食品、饮料和个人清洁用品。事实上,大家日常使用的许多产品都是由宝洁企业制造的。

1.0 Introduction

Since globalization facilitates the communication of information and resources, competences among companies become more and more intense. In order to grab some market share and have a place in their own line, companies have to design proper strategies to help them earn a higher profit margin and sustain that position over a long period. (Philip, 2003) Among all those theories concerning strategic management, Michael Porter’s five forces model and the core competence theory are very practical and both of them are often applied by companies to design their strategies to help them in facing challenges brought by other competitors.

This essay will evaluate Michael Porter’s five forces model and the core competence theory in a critique way. As to make it more clearly in explaining the advantages and disadvantages of both theories, this essay will use P&G as an example.

2.0 Brief introduction about Procter & Gamble

Procter & Gamble is a daily product manufacturer of the United States. It is also one of the biggest daily products company in the world. Established in 1837, Procter & Gamble now has more than 110,000 staffs all over the world. P & G enjoys a high reputation and acquires a very high market share in the line of daily products. It mainly deals with shampoo, hair conditioner,skin care,cosmetics, baby care products,women sanitary articles,medicine, food, beverage and personal cleaning supplies. In fact, many of our daily used products are all manufactured by P&G.

3.0 General view about Michael Porter’s five forces model

The five forces model is put forward by Michael Porter. According to Porter, there are five forces that influence and decide the competence intensity and market appeal in a line, namely they are suppliers’ bargaining power, buyers’ bargaining power, threat of potential new entrants, threat of substitute products as well as the rivalry among competitive sellers. (Michael Porter, 1980)

Firstly, bargaining power of suppliers has a great impact on the production of a company. It refers to suppliers’ ability to raise prices or reduce the quality of goods. (Mike, 2009) If the supplier supplies some products with unique characteristics and hardly can be substitutes by other products or the supplier has many partners and neither of the clients is the sole important client to the supplier, its bargaining power is stronger. For P&G, suppliers’ bargaining power is relatively low for the daily products are manufactured in a lower price and they are manufactured in low payment and high labor intensity countries.

Secondly, Buyers’ bargaining power can be strengthened if there are a few buyers and each of them acquires a large proportion in the sellers’ market. Thus, it will raise the costs of company and reduce their profit margin. (Charles & Gareth, 2012) For P&G, buyers’ bargaining power is also weak. Though there are many other daily products manufactures, P&G has a good reputation on its product quality, price as well as company image. Thus, buyers usually will stick to buying its products without shift to other brands.

Thirdly is about threats of potential new entrants. Along with bringing in some new force and new resources to the line, potential new entrants will compete with current companies for source materials and market share. New entrants often bring additional capacities together with them. (Robert et al., 2008) The threat of potential new entrants comes from two major factors: the entry barrier of that line and the reaction of current companies. Entry barrier mainly includes scale economy,product differentiation, capital needs, conversion cost, governments’ regulation and policy, natural resources, geographical environment and so on. Reaction of current companies refers to their actions on maintaining market share and retaining customers. The more active actions they take, the threat of potential entrants is weaker. As to the line of daily products, the cost is very low. However, the entry barrier is very high. It is hard for new entrants to get known by customers since big daily manufactures like P&G and Unilever are well known and widely accepted by people all over the world. If a new entrant wants to grab market shares, it has to develop for many years and strive hard on its advertisements, research and development, sales network, brand value and other aspects.

The fourth force is the threat of substitute products. For substitute products can satisfy the same need as other competitors, companies facing a great challenge. (Farhad & Azhdar, 2003) First of all, the price advantage and profit elevation will be limited when some substitute products occur. Then, substitute products manufacturer exert pressures on the current enterprises. In order to face the challenge, current enterprises have to invest more money on product innovation, improve product quality as well as develop distinctive features. All in all, the lower price, better quality the product is and lower customer conversion cost is, the more threatening to current enterprises.

Last but not the least is about the rivalry among existing firms. It usually shows in competitions on price, advertisements, product innovation, after sell services and so on. The rivalry among competitors can be strengthened when the entry barrier of the line is relatively low and there are many strong opponents. Besides, if the competitors lower prices to promote, it will also make their competition more intense.

3.1 Advantages of Michael Porter’s Five Forces Model

As Michael Porter’s Five Forces Model applied by many enterprises in their strategy management, it proves to be very effective in several aspects.Once they are understood, a company can develop a strategy that utilizes them to their advantage. (David & Garry, 2010)

Firstly, the five forces model gives a comprehensive overview for enterprises to evaluate their current marketing situation. It analyzes the forces that influence a company’s management and competence both inside and outside the line. Besides, it considers both current threat and potential threat, i.e. potential new entrants. In managing these five forces, a company can be more alert to market changes so as to make quick adaptations.

Secondly, together with other strategy like stakeholder mapping, Porter’s five forces enables companies to be more competitive.

Thirdly, Porter’s five forces model develops three successful and widely-used strategies. They are overall cost leadership strategy, differentiation strategy and focus strategy.

Among them, from my perspective, the most influential one is differentiation strategy. The five forces model put forward the threats of potential new entrants, the rivalry among current competitors and well as the bargaining power of the buyer, all of these exert great pressure on enterprises. They have to do a lot to sustain or acquire more market share and make profits. Differentiation strategy will make them develop some market mix that is different or better than their competitors or hard to be imitated by potential new entrants. Take P&G as the example, P&G always seeks to the disparity among different brands which are dealing with the same product. It put much effort on the function, package, propaganda and other aspects to develop distinctive brand feature and value. For instance, considering different customers may have different preference to product mix, P&G makes nine market segment and designs nine different brands to meet its customers’ needs. In this way, it is successful realizes its aim to enlarge customer base and retain customer loyalty.

3.2 Disadvantages of Michael Porter’s Five Forces Model

However, during the practice of Porter’s five forces, some companies as well as researchers criticize the five forces model for being too ideal and not so practical. Specifically, the limitations of the five forces model can be shown in three aspects. For one thing, this model can be fully practiced based on the assumption that the company or staff responsible for making strategy has a better knowledge about the whole line; however, it takes a too long time and hardly can be realized. For another thing, Porter’s five forces emphasize the competition among the same line which neglects the fact that competitors also can cooperate with each other. Thirdly, it suggests the scale of an industry is stable; however, market can be enlarged during sustainable development and innovation.

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