Industry Environment

In any industry, whether in the industrial countries or international, whether produced goods or services, competition rules included in the competition five factors, namely the influx of new immigrants, the threat of product substitution, the bargaining power of buyers, the bargaining power of suppliers and competition among the competitors there (Porter, 1985).
Entry includes obstacle-economic scale, product differentiation, brand identity, switching costs suppliers, capital needs, access to distribution networks, absolute cost advantages, government policies and resistance from the company. The power supplier differentiation is determined by the entries, the cost to switch suppliers from suppliers and companies in the industry, the input substitution, the concentration of suppliers, the importance of the volume of sales for suppliers, the cost relative to the total purchase in the industry, the impact of input cost or differentiation and integration threat to the future relative against the threat of integration to the back by the company in the industry. Determinants of the threat of product substitution of price and performance product substitution, the cost to switch suppliers and buyers to the trend of substitute products. Determinants of the strength of buyers includes purchaser concentration compared with the concentration of the company, the volume of purchase, the cost to switch suppliers from the buyers relative to the cost to switch suppliers from the company, information, buyers, and the ability to perform reverse integration, product substitution, the purchase price, product differentiation, brand identity, the impact of quality, the profit incentive buyers and decision makers. While the determinants of competition among companies that there is a growth industry, fixed costs, excess capacity, product differentiation, brand identity, switching costs suppliers, concentration and balance, motley competitors, betting corporation and exit barriers.
If the five factors determine the strength and they merely a function only of the characteristics instrinsik industry, competitive strategy will be dependent on the selection of appropriate indistri and understanding of the fifth factor is better than its competitors. Thus, the benefits can not compete understood if we do not see a company as a whole. Excellence comes from a competitive range of activities undertaken in the company to design, create, distribute, promote and market the products. In each of these activities can affect the relative cost position of the company and create the basis for differentiation. Strategy costs and benefits of differentiation strategies seek competitive advantages in a wide variety of industries, while pursuing strategies focus on the benefits of cost (the cost of focus) or differentiation (focus on differentiation) in a narrow segment.