A framework for examining a company's competitive environment is Porter's Five Forces. A company's profitability is impacted by the quantity and strength of its rivals in the marketplace, possible new market entrants, suppliers, customers, and competing products.
Porter's Five Forces:
Rivalry between competitors, supplier and buyer negotiating power, the threat of new entrants, and the threat of replacement are the five forces identified by Porter in his model. Competitor competition focuses on the strengths and weaknesses of the rivals so that the business can plan accordingly.
Since customers are drawn to the goods because it is distinctive, the suppliers' bargaining power claimed that the change in price of the product was influenced by their offer. The number of buyers and the volume of orders each buyer places determine the bargaining power of the buyers. If a competitor enters the market, the danger of new entrants affects the company's overall position.
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