Download Porter`s Five Forces The internet significantly influenced business

Porter’s Five Forces
The internet significantly influenced business and strategic planning. In your opinion,
according to Porter's Five Forces Model, has competition increased or decreased overall as a
result of the Internet and e-commerce? Justify and support your response with two
examples from your text or external resources. Respond to at least two of your classmates’
posts. You must create one initial post and at least two responses, for a minimum of three
posts for this discussion
In terms of the five forces, the internet and e-commerce themselves are newentrant threats that
have significantly increased the overall competition for conventional business models, in turn,
forcing many of those business to either supplement with, or completely transfer their business to
the internet. For example, in recent years conventional radio businesses have taken on a new
competitive threat from such satellite radio products as Sirius and XM Radio, which themselves
are in competition with cell phone radio applications such as Pandora, and iHeart radio, among
others. Sirius has since bought XM radio to combine forces against this growing and now much
more fragmented industry. This leaves conventional radio businesses not only having to compete
with entrant threats but also with substitute threats from the cell phone industry. According to a
recent report, from 2000 through 2010, teens and young adults cut their radio-listening time by
50% as they became infatuated with the Internet, cellphones and video games (Leiberman,
2011). In terms of strategic planning, this is a very important statistic to consider because in ten
plus years the millennial generation will represent the majority of all customer bases as the many
of the stubborn and technologically-inept baby boomers will no longer pose a demand.
Being the primary benefit of the internet is information accessibility, any business that involves
the sale of information, such as music, news, movies, or books, have all seen a drastic increase in
competition which has helped to shape those industries entirely. Blockbuster for example, ruled
the movie rental industry until people started realizing that the same movies are much more
accessible and conveniently purchased through electronic means. In response to the emergence
of Netflix, Blockbuster offered a no late fee policy; however, this did not solve the problem. In
fact, it made things worse with a further increase in capital costs, which then forced more
locations to close, making it even more inconvenient to rent movies, and as a result, customer
defection snowballed (Woloszynowicz, 2010). Blockbuster's strategic management failed as they
failed to recognize the new shaping of the industry.
Even businesses that do not sell information, such as automobiles, auto parts, appliances, and
furniture, have also seen an increase in competition from the internet and e-commerce in the
form entrant threats. For example, auto customizing/wheel and rims shops used to be the
intermediary for the typical customer to order parts for their vehicle; now the internet is the
middle man at much cheaper cost like eBay, and many of those shops have since closed down.
The auto industry not only faces a local threat but also with the millions of cars now being sold
on the internet. Overall, I think it is clear to see how the internet and e-commerce has increased
competition.
References:
Abraham, S. C. (2012). Strategic Management for Organizations.San Diego, CA; Bridgepoint
Education, Inc.
Lieberman, D. (2011). In a renaissance for radio, more listeners are tuning in. USA
Today Media. Retrieved from http://www.usatoday.com/money/media/2011-03-21-Radiolisteners-growing.htm
Woloszynowicz, M. (2010).Business Lessons from Blockbuster's Failure.Web 2.0 Development
and Business Lessons. Retrieved from http://www.w2lessons.com/2010/09/business-lessonsfrom-blockbusters.html