Strategic Management-Case study Nike - Research Paper Example

Strategic Management ‘The Five Competitive Forces That Shape Strategy’ - Summary The fundamental objective of designing strategy is to deal with the growing competition and maintain profitability. For a firm to continue its existence and maintain profitability in the long run would call for the need to strategically act in response to the competition. Therefore, it is required to keep a track of the established competitors. A proper analysis should be made which should take into concern the other factors lying beyond the competitive arena as well as the competitors.

It has been believed that apart from the competitors there are other factors too that could adversely affect the potential gains of a particular firm. The other factors entail the customers who are capable enough to compel firms to bring down its prices by triggering competition between the particular firm and its respective competitor. Suppliers can also restrict the profits of the firms by way of demanding higher prices. Fresh participants or competitors with new facilities and zeal to capture the market can escalate the investments for a firm in order to stay in the competition and compete with the fresh force.

Lastly, alternate choices also negatively manipulate the profit of the firms as it can facilitate in taking away the customers of a particular firm by luring them with the alternate choices. Therefore, all these factors need to be evaluated while designing an effectual strategy of a firm. The evaluation would provide a complete understanding of the ways by which the profit can get affected in an industry (Porter, 2011).Firms should get a complete understanding of the mentioned forces and structure plans particularly to cut down on the profits that are being taken away by the other market contestants or competitors.

Firms require taking heed of those forces and planning accordingly so as to continue its sustained existence. Firms should take steps to counterbalance the power of the suppliers by setting specifications for the procured materials so that it becomes easy for the firm to change vendors without affecting the operations as well as increasing the related costs. In order to reduce the effect of the powers of the customers, firms need to develop and spread out their services as well as products so that it can hold on to the customers from losing to its opponents.

It is a common phenomenon for the opponents to alter its prices in order to capture the market. Owing to this reason firms need to manufacture products which should vary notably from the products of its competitors. Therefore, firms need to design strong plans for investing in production so that the differentiation among products can be maintained. It is also equally important to keep away the new participants at bay by escalating the expenses related to competing with a particular firm. This can be done by augmenting the expenses related to Research & Development (R&D).

Firms should also take measures to restrict the threat of alternatives. This can be attained by the firms by providing enhanced worth with the help of extensive accessibility to the product (Porter, 2011; Porter, 2008).Therefore, it is quite evident that the above mentioned factors or forces need to be primarily considered in order to design an effectual strategy for a firm.ReferencesPorter, M. E., 2011. How Competitive Forces Shape Strategy. University of Cape Town, pp. 34-50.Porter, M. E., 2008.

The Five Competitive Forces That Shape Strategy. Harvard Business Review, pp. 1-18.