Creating a defendable position

Essay from the year 2002 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7 (A-), University of Hull (Business School), course: Strategic Analysis, language: English, abstract: Competitive advantage is the basis for most strategic decisions and its' creation a key issue of management. The most important concepts of competitive strategy are Michael Porter's 'five forces' and 'generic strategies', published in his books Competitive Strategy (1980) and Competitive Advantage (1985). The first sections will describe his basic ideas and explain how the five forces are connected to the generic strategies. This is followed by arguments in which way one strategy helps to create a defendable position in an industry. A company is not isolated, but exists in a complex network. 'The five forces framework helps identify the sources of competition in an industry or sector'1 and the important factors in the environment of a company are: Competitive Rivalry, purchasing power of supplier, purchasing power of buyer, threat of new entrants and of substitutes2 (Figure 1). [...]