BUSINESS STRATEGY Assignment Example | Topics and Well Written Essays - 3000 words

BUSINESS STRATEGY - Assignment Example Introduction In a general sense, business strategy is regarded as the selection of effective and valuable business ideas, which aids in meeting organisational objectives. Formulation of business strategy is typically considered to be an imperative task for every organisation, whether small or large. It begins with the formulation of innovative business ideas by the concerned persons of various organisations. The responsibility of these concerned people does not end with the formulation of the ideas, but also they need to find out the best ways to implement those ideas and also have a frequent look whether those ideas are working well or not. All these significant aspects have been viewed to provide active support to the business managers of an organisation in making effective decisions towards the accomplishment of organisational targets (Kourdi, 2010). This assignment will analyze two of the decisive models that include ‘Porter’s Five Forces Model’ and ‘Por ter’s Diamond Model’ as a new way of understanding competitive advantage. In this regard, Porter’s Diamond Model is used as the most appropriate basis of measuring the competitiveness at the company level and thus, it is also considered as the model which provides the learning of competitive advantage in accordance with different opinions. ... Both of these models that proposed by Michael Porter are considered to be the effective tools for determining the position of the companies in the international competitive business markets (Porter, 1990). Hence, in this assignment, the study of various elements along with the principles of these models will be carried along with their practical implications within business and economic context. In the last section of the assignment, contemporary examples will be analysed wherein the aforesaid models help to analyse along with understand the relevant business and economic context. 2. Principle and Structural Elements of the Porter’s Model 2.1. Porter’s Five Forces Model 2.1.1. Structural Elements Porter’s Five Forces Model is a strategic insight, which avoids keeping the company’s competitive edge at risk and also ensuring the attainment of greater profit margin on a long term basis. The profit margin of the companies depends on a number of factors that ca n also be regarded as the structural elements of the aforesaid model. These elements have been mentioned below. Threat of New Entrants: It is the prime responsibility of the companies to prevent its competitors from entering into the business markets where they operates. This particular structural element depends on numerous factors such as market size, raw materials, cost of entry and also the cultural barriers (Lima, 2006). Competitive Rivalry: The competition between the companies determines the demand for the market. It is the analysis that performs by the companies to identify their competitors and determining their strengths along with weaknesses (Lima, 2006). Bargaining Power of Buyers: This structural element helps to control the profitability in the market. The companies must be conscious in