Competitive forces

Michael Porter's classic 1980 model of the five main competitive forces that impact a company still provides a pertinent framework for reviewing threats arising in the e-business era. We will use it here to introduce the different competitive forces arising from the interplay between the different stakeholders of the micro-environment, each of which will be explored in more depth later in the chapter. Table 2.2 summarises the main impacts of the Internet on the five competitive forces affecting an organisation. Note that, as seen later in this chapter and in Chapter 4, this form of analysis does not directly emphasise the importance of neutral intermediaries and strategic partnerships in affecting the visibility of an organisation within the online marketplace. Intermediaries such as search engines, price comparison sites and even blogs often have a strong influence on the balance between the bargaining power of buyers and suppliers and tend to intensify rivalry between existing competitors.

Table 2.2 Impact of the Internet on the five competitive forces

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