The forth week

This week’s lecture talked about the Porter’s five forces that helps us to analyse the micro environment. The five forces included the threat of substitutes, the bargaining power of buyers, bargaining power of suppliers, competitive rivalry within the industry and the threat of new entrants.

We are told that the coming examination is not going to be the same as the traditional one, which means it doesn’t only requires us to memorize those theories and definition of the key terms, but only to apply what we learnt to a case study. This also requires students to analyze those cases and apply them into real- life example. This enables students to understand those theories thoroughly as they can learn to apply them to cases. Teacher will show us the case study that maybe an organization or a particular industry. We are also asked to think about how do we succeed in a case study examination.  

We are then asked to apply the things we learnt into a real life example. We are asked to discuss the steel industry. During the lesson, we are required to talk with other classmates to enhance our understanding towards the 5 forces. Before the lesson, I started to prepare this case study. At that time, many questions popped up in my mind. Can competition positively or negatively affect those companies? How can a new entrant survive when there are already many competitors? How can those companies attract consumers when there are more and more entrants? After watching the video, I learnt that competition may not be a harm to companies. Companies are encouraged to improve in different aspects such as their services, features and customers support. However, if companies try to lower the prices of their products so as to attract customers, it may lead to price war and destructive battle.

This week’s lessons allowed me to learn the market structure and strategies of those companies. I learnt that surviving under fierce competition may not be an easy task and companies should change their structure time to time. Non- price competition is required when there are more and more competitors. It is quite interesting that I would like to explore more about it!!!