Discussion on SWOT Analysis and the Porter’s Five Forces

Today there is a great amount of tools and models that could be used in order to understand the overall situation in any company or organization. Therefore, the vast majority of people consider the SWOT analysis and the Porter’s Five Forces analysis as the best tools and / or models that could help people truly understanding the organization’s position on the market and in the industry as a whole. To my opinion, these are two different tools to compare as they give different information, depending on what is important for the particular situation that any business or an organization is facing (Finlay, 2000).

The Porter’s Theory and Five Forces Model could be used in order to evaluate the performance of the company. According to the Porter’s theory and five forces model, the companies gain a competitive advantage as they use the Porter’s Five Forces Model, which aids to overlook all the perspectives for their business strategy, as well as analyze the aspects addressed by the five forces model such as the threats of new entry and substitution, buyer and supplier powers, and the competitive rivalry (Porter, 2008).

The Michael Porter’s five forces framework analyses the business, as well as the industry, from the position of 5 elements that should be developed in order to achieve the strategy created by the companies. Therefore, the Porter’s theory and the five forces model could be used as the strategy to emphasize the level of the industry, which the company perceives in the first turn. Thus, the Porter’s theory and the five forces model illustrates the emphasis towards the business matters of the companies on the market (Griffin and Pustay, 2010).

The SWOT analysis can be helpful to understand the situation around the company in terms of the strengths, weaknesses, opportunities, and threats. In other words, this is a means of planning that the head of the company should adhere to in order to remain sustainable on the marketplace. It could help to manage the variety of objectives in relation to the internal and external factors that play an important role in the achievement of the target goals of the company (Zahorsky, 2009).

To conclude, both analysis models are useful for the industry analysis depending on the purpose of the evaluation that the company performs using the analysis tool. In other words, each model analysis applies to an organization in a completely different perspective. In addition, these kinds of analysis could be used together in order to understand the situation of the company in more depth and consequently make a decision based on the high-quality information analysis (Richard and Beatty, 2005).

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