Name : Yusmazy bin Md.

Yusup
Student No : GP02663
Instruction
Answer following Question:
Describe Porter's Five Forces Model and Porter's Value Chain using real organisation
examle!s"and
disla# it using an# $eb %&' tools&
(ou ma# exlore how to use $eb %&' tools in the ifolio guides&
Dro the file with the lin) to the resentation&
Deadline is b# *+th ,ctober %'*-&
Tass in!ormation
.his tas) is an assignment
/load 0e1uired File to comleted the .as)
.his tas) is 2ndividual .as)
3ast udate: 4h ago
". Introduction
2n a mar)et econom#5 an organisation must first assess the mar)et viabilit# and anal#se
the level of cometition within the industr# before entering into the industr#& 2t is vital for
the organisation to have this )nowledge in order to come u with a comrehensive
information s#stems lanning& ,ver the #ears5 a number of methodologies have been
introduced to hel information s#stem executives to ta)e on this tas)& 2n Chater -:
2nformation 6#stems Planning5 Mc7urlin introduced + lanning techni1ues which are
6tages of 8rowth5 Critical 6uccess Factors5 Porter#s $i%e $orces Mode&5 Porter#s
'a&ue ()ain "na&ysis5 9:;usiness Value Matrix5 3in)ages Anal#sis Planning and
6cenario Planning&
*. Porter#s $i%e $orces Mode&
.o better understand the mar)et5 Porter has introduced five forces model& .he five
forces model consists of these )e# forces which are threat of new entrants5 bargaining
ower of suliers5 bargaining ower of bu#ers5 threat of substitute roducts or services
and rivalr# among existing cometitors&
.hreat of new entrants
Products of high demands create rofitable mar)ets that attract new firms& .he
emergence of these new firms increase the level of cometition among firms thus
decreasing rofitabilit# for all firms in the industr#& /nless the ca)e is exanded5 the
mar)et share will shrun) in relation to the number of new entrants over time& For
examle5 the mar)et for women scarfs for Muslims was lucrative and has seen the
establishment of bouti1ues such as ;uti) Fareeda that offers variet# of selection for
consumers& .his new oortunit# has also attracted new suliers for scarfs and
witness a lot of shos being established nationwide& 6carfs are now available in night
mar)ets5 suermar)ets as well as online oerated b# new firms& 2n order to secure their
mar)et shares5 these firms need to be more creative to attract more bu#ers through
innovative strateg# in mar)eting5 ricing5 and lo#alt# rograms&
;argaining ower of suliers
6uliers of raw materials5 comonents5 labour and services to the firms can be a
source of ower over the firm when there are onl# a few substitutes& ;an) 2slam !M"
;hd& maintained their oerations using 2. solutions rovided b# 6ilverla)e 8rou& ,ver
the #ears ;an) 2slam has develoed deendencies to 6ilverla)e 8rou and this gave
ower to the grou as a main sulier to ;an) 2slam& For new ugrades and
imrovement to their alications5 6ilverla)e is able to negotiate better business for the
grou&
;argaining ower of bu#ers
.he bargaining ower of bu#ers is the abilit# of consumers to ut firms under ressure to
rovide better roducts and services& 2n the case of ;uti) Fareeda5 since the bu#ers has
man# alternatives5 the firm needs to lower this ower b# offering lo#alt# rograms such
member cards5 attractive ac)ages such as customised designs or suerior roducts at
attractive ricing&

.hreat of substitute roducts or services
.he existence of alternative roducts or services ost threats to firms because the
consumers easil# could sh# awa# from one roduct given that the other roduct offers
better 1ualit#5 better after sales services or siml# lower in rices& .his is true in the
case of bottled mineral water for instance& For erceived suerior 1ualit# and good
mar)eting strateg# and brand ositioning5 consumer might choose the brand 9vian&
<owever ta)ing rice into accounts consumers ma# siml# switch to other brand such as
6rit=er or Dasani to name a few&
0ivalr# among existing cometitors
2n the industr#5 firms are constantl# finding wa#s to grow their business and exand their
mar)et shares& .actics are often ut in lace which include reducing rices5 increasing
advertising camaigns and differentiating roduct& For examle5 Air Asia is constantl#
finding wa#s to comete with MA65 Malindo and Firefl#= in order to cature otential
travellers& .he# offers low riced tic)ets with attractive holida# ac)ages to attract more
business to carrier&
.he model can be visualised using Figure * below&
Source: Micheal E.Porter, Competitive Strategy (New York: The Tree Press, !"#$.
(. Porter#s 'a&ue ()ain "na&ysis
(ears later5 Porter continued b# introducing value chain anal#sis& ,rganisation as a
s#stem is made of subs#stems each with its inuts5 transformation rocesses and
oututs& 2nuts5 transformation rocesses and oututs involve rocurement and
consumtion of resources& During the creation of the oututs5 values are added through
activities& ,rganisation engage in numerous activities and according to Porter5 these
activities can be categorised into rimar# activities and suort activities& Primar#
activities include:
2nbound logistics
2nbound logistics involve the relationshi with suliers and include all the activities
re1uired to receive5 store5 and disseminate inuts& Constant ugrading of ordering
s#stem5 aroved vendor lists5 and in:store rocess for examle will imrove firm>s
effectiveness and efficienc#&

,erations
,erations are all the activities re1uired to transform inuts into oututs& Processes
involved in this activities must be fine tuned from time to time to eliminate wastage in
terms of energ#5 labour5 time and cost of oeration&
,utbound logistics
,utbound logistics include all the activities re1uired to collect5 store5 and distribute the
oututs& 9fficient outbound logistics will reduce cost of deliver# and maximised
resources to store oututs&
Mar)eting and sales
Mar)eting and sales are activities that will inform consumers about roducts and
services5 ersuade and influence consumers to urchase them5 and facilitate their
urchase with before and after sales services& .he cometitive advantage for a firm lies
in how well this activities are lanned and imlemented in order to cature new clients
and maintain the existing ones&
6ervices
6ervices includes all the activities re1uired to )ee the roduct or service wor)ing
effectivel# for the bu#er after it is sold and delivered& After sales service which are
reliable5 efficient and timel# will create lo#al customers for the organisation&
$hereas suort activities are:
Firm infrastructure
2nfrastructure serves the firm>s needs and ties its various arts together& 2t consists of
functions or deartments such as accounting5 legal5 finance5 lanning5 ublic affairs5
government relations5 1ualit# assurance and general management& .hese functions
must wor) hand in hand to ensure firms can oerate in the most cost effective manner&
<uman resource management
<uman resource management consists of all activities involved in recruiting5 hiring5
training5 develoing5 comensating and la#ing off staffs& <uman caital la#s a vital role
in order for organisation to sustain its business in the long run& 2t is erhas the most
difficult art to manage since it involves develoment of human5 behaviour5 culture5 s)ill
and )nowledge&

.echnolog# develoment
.echnological develoment ertains to the e1uiment5 hardware5 software5 rocedures
and technical )nowledge brought to bear in the firm>s transformation of inuts and
oututs& Aroriate information s#stem lanning and strateg# are imortant to ensure
maximum return of investment in technolog# for the organisation to achieve cometitive
advantage&
Procurement
Procurement is the ac1uisition of inuts or resources for the firms& Procurement s#stem
needs to be aligned and wor) closel# with other activities such as mar)eting and sales5
oeration5 and inbound?outbound logistics to ensure resources are in lace for
roduction roducts and services& Proer rocurement lan and strateg# will avoid
overstoc)ing of resources and enable organisation to exercise @Aust in time> roduction&
.he visual reresentation of these activities can be shown as Figure % below&
Source: Micheal E.Porter, Competitive Strategy (New York: The Tree Press, !"#$.
0eference
Porter5 M& *BC4& Cometitive Advantage: Creating and 6ustaining 6uerior Performance& .he
Free Press5 7ew (or)&
$i)iedia5 .he Free 9nc#cloedia& %'*-& http://en.wikipedia.org/wiki/Porter_five_forces_analysis D+
,)tober %'*-E&
2FM Management .echnolog# Polic#& Decision 6uort .ools&
http://www.ifm.eng.cam.ac.uk/research/dstools/value-chain-/. DF ,)tober %'*-E&
6trateg#:Ge#&com& htt:??www&strateg#:)e#s&com?michael:orter:five:forces:model&html& [7
Oktoer !"#$%.