FIVE FORCE

ANALYSIS AND

BUSINESS PROCESS

REENGINEERING

SUBMITTED BY :

AKSHITA KHANDELWAL-15/92106

HEENA SONI-15/92121

INDE

X

1. MICHAEL E PORTER’S DESCRIPTION

2. 5 FORCE ANALYSIS3. STRENGTH AND LIMITATIONS OF 5

FORCE ANALYSIS4. BUSINESS PROCESS REENGINEERING

5. WHAT IS BUSINESS PROCESS?

6. WHAT IS REENGINEERING?

7 .REASONS FOR REENGINEERING

8. BENIFITS OF REENGINEERING

9. BPR PRINCIPLES10. PROCESS OF BPR11.EXAMPLE OF BPR12.CONCLUSION13. BIBLIOGRAPHY

MICHEAL E. PORTER’S FIVE FORCE ANALYSIS

MICH

AEL E

. PO

RTER

Born in 1947Professor in Howard business school

Introduced porter’s five forces model

Has Written 18 books and 125 articles

Source-https://www.google.co.in/search?q=michael+

e+porter&biw=1366&bih=623&source=lnms

&tbm=isch&sa=X&ved=0ahUKEwiC4ZGsto_P

AhXJmZQKHW95BwcQ_AUIBigB#imgrc=y-u_P

SRw4FGx9M%3A

source- https://www.google.co.in/search?q=five+

force+analysis&espv=2&biw=1366&bih

=623&source=lnms&tbm=isch&sa=X&v

ed=0ahUKEwiy_viTt4_PAhVBRZQKHZ-0AF

UQ_AUIBigB#imgrc=QtPXrWa-yug4KM%3

A

1.TH

REAT

OF

NEW

ENT

RANT

S

BARRIERS TO ENTRY-- Economies of scale

- Capital requirement- Product differentiation

- Customer switching cost- Government policy

- Access to distribution channel- Expected retaliation

2. B

ARGA

ININ

G PO

WER

OF

SUPP

LIERS

SUPPLIERS EXERT POWER IN THE INDUSTRY

BY- Threatening to raise price and reduce quality.

Powerful suppliers can squeeze industry profitably

if firms are unable to raise cost increases.

SUPPLIERS ARE LIKELY TO BE POWERFUL IF

- Supplier’s industry is dominated by a few firms

- Supplier’s products have few substitutes

- Buyer is not an important customer to suppliers

- Supplier’s products are differentiated

- Supplier’s product has high switching cost.

- Supplier’s product is an important input to buyer’s

product

3. B

ARGA

ININ

G PO

WER

OF

BUYE

RS

BUYER’SCOMPETE WITH THE

SUPPLYING INDUSTRY BY- - Bargaining down prices

- Forcing higher quality - Paying firms off of each other BUYERS ARE LIKELY TO BE POWERFUL IF-

- Buyers are concentrated- Buyers face few switching cost

- Buyers have full information

- Products are undifferentiated

- Buyers present a credible threat of

backward integration

4. T

HREA

T OF

SU

BSTI

TUTE

Products with similar features

limits the change in prices .

KEYS TO EVALUATE SUBSTITUTE

PRODUCTS: Products with improving price

/performance tradeoffs relative to

present industry products - EXAMPLE- - Electronic security system in place

of security guards - Fax machines in case of overnight

mail delivery

5. R

IVAL

RY A

MONG

EXIS

TING

COM

PETI

TORS

INTENSE RIVALRY OFTEN PLAYS OUT IN

THE FOLLOWING WAYS: Using price competition Staging advertising battles Increasing consumer warranty or service

Making new product introductions

OCCURS WHEN A FIRM IS PRESSURED OR SEES AN

OPPORTUNITY- Price competition often leaves the entire

industry worse off. Advertising battles may increase total

industry demand but may be costly to

smaller competitors

STRENGTHS

The five forces

model is a strong

tool for

competitive

analysis on

industry level

It provides useful

information for

performing a

SWOT analysis.

LIMITATIONS

Inside out strategy is

ignored.

It does not copes with

synergies and

interdependencies within

the portfolio of large

corporations.

The environments, which

are characterized by rapid,

systematic and radical

change require more

flexible, dynamic or

emergent approaches to

strategy formulation.

Sometimes it may be

possible to create

completely new markets

instead of selecting from

existing ones.

BUSINESS PROCESS REENGINEERING

INTRODUCTIONIn today’s ever-changing world, the

only thing that doesn’t change is

‘change’ itself. In a world increasingly

driven by 3 C’s- customer,

competition and change,Companies

are on the new lookout to find the

solutions for their business problems.

Recently, some of the more successful

business corporation in the world seem

to have hit upon an incredible solution-

BUSINESS PROCESS REENGINEERING.

FOR EXAMPLE:Walmart reduced

restocking time from 6 weeeks to 36

hours.

WHAT IS BUSINESS

PROCESS ?A business process is a

collection of activities which

together produce something

of value to a customer.

WHA

T IS

RE

ENGI

NEER

ING

? Reengineering is the fundamental

rethinking and radical redesign of

business processes to achieve

dramatic improvements in critical

contemprory measures of

performance such as cost,

quality, service and speed.

BPR advocates that enterprises

go back to the basics and

reexamine their very roots.

It doesn’t believe in improvements. Rather it aims at

total reinvention. BPR focusses on processes and

not on tasks, jobs and people.

REASONS FOR

REENGINEERINGOLD ERA

High demand.

Efficiency

Control

NEW ERA

High competition

Innovation

Speed

Service and

quality

BPR

PRIN

CIPL

ES

Organise around outcomes, not

tasks. Have those who use the output of

the process perform the process.

Subsume information processing

work into the real work that produces

the information. Treat geographically dispersed

resources as though they were

centralized Capture information once and at the

resource Link parallel activities instead of

integrating their results. Put decision points where the work is

performed and builds control into the

process.

PREPARE FOR BPR

• Build cross functional team

• Identify customer driven objectives

• Devolep strategic purposes

MAP &ANALYSIS AS IS PROCESS

• Create activity models

• Create process models

• Simulate & perform ABC

DESIGN TO BE PROCESSES

• Benchmark processes

• Design to be processes

• Validate to be processes

• Perform trade off analysis

IMPLEMENT REENGINEERED

PROCESSIMPROVE

CONTINUOUSLY

•Evolve implementation plan

•Prototype & simulate transition plan

•Initiate training programs

•Implement transition plan

•Initiate ongoing measurement

•Preview performance against targets

•Improve process continuously.

PROCESS OF BPR

EXAM

PLE

OF

BUSI

NESS

PRO

CESS

RE

ENGI

NEER

ING

FORDIn his suggestion to FORD Michael

Hammer proposed something radical:

ELIMINATE THE INVOICE. In the new

scenario, a buyer no longer needs to send

a copy of the purchasing order form to the

creditor administration. Instead he

registers an order in the online database.

When the items appear at the store the

storekeeper checks whether these

corresponds to the purchase order form in

the system. In the old system it did not

have access to this form. If the items

match the order, he accepts them and

registers this in the computer system. If

they do not, the items are returned.

Hammer reported that ford benefited

drastically from this change with an almost

75%decrease in workforce in the accounts

payable department.

CONCLUSION

ON

BPR

Empowering employees Eliminating waste ,

unnecessary management

overhead, and obsolete and

inefficient processes. Producing often significant

reductions in cost and cycle

times Enabling revolutionary improvements in many business

processes as measured by

quality and customer service

Helping top organisations to

stay on top and low achievers to

become effective competitors.

REFERENCES http://www.slideshare.net/yuvar

ajhid/porters-five-forces-248471

82?next_slideshow=1

https://en.wikipedia.org/wiki/Por

ter%27s_five_forces_analysis

http://www.businessnewsdaily.c

om/5446-porters-five-

forces.html

http://www.slideshare.net/Neelk

amalSharma/business-process-r

eengineering-

15362180

https://en.wikipedia.org/wiki/

Business_process_reengineering

WIKEPEDIA