Analysis Using Porter's Five Forces

777 Words4 Pages
The model of the Five Competitive Forces was developed by Michael E. Porter in his book Competitive Strategy: ‘Techniques for Analyzing Industries and Competitors’ in 1980. Since that time it has become an important tool for analyzing an organization’s industry structure in strategic processes. Porter’s model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on an understanding of industry structures and the way they change. Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porter’s model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry. This report looks at Accra Brewery Limited, a beverage manufacturing company in Ghana and how these five forces affects it competitiveness. An action plan will also be proposed to help the company to deal with the effects of these forces. Basic Forces Governing Competition Threat of new entrants The alcoholic beer beverage industry in Ghana is dominated by two companies namely Guinness Ghana Breweries Ltd and Accra Brewery Ltd. These two companies have built effective barriers to entry with huge investment in building brand equity and controlling distribution channels through strong trade partnerships. New entrants into the market are mainly exports from Asia and Europe which mainly compete on price. New entrants who want to produce locally have
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