Page 37 - APM Integrated Workbook STUDENT S18-J19
P. 37

Environmental influences






                           External analysis




               1.1 Introduction

               There are two models available for considering the impact of external factors on
               performance:

                    Porter’s 5 forces – focus is on industry level

                    PEST analysis – focus is on the macro environment.


               1.2 Porter’s 5 forces


                    Industry attractiveness depends of five forces.

                    The stronger the force, the lower the attractiveness (and potential profitability) of
                     the industry.

                                                      Threat of
                                                    new entrants







                          Power of                  Competitive                    Power of
                         suppliers                      rivalry                   customers







                                                      Threat of
                                                     substitutes



















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