FORMULATION STRATEGY UNDER THE INFLUENCE OF POWER COMPETITION

Article English OPEN
Ljiljana Stošić Mihajlović (2014)
  • Publisher: KD Mapro
  • Journal: Journal of Process Management. New Technologies (issn: 2334-735X, eissn: 2334-7449)
  • Subject: strategy | competition | business excellence | Technology (General) | T1-995

In this work, the subject of the research is defined starting hypothesis that formulation in the form of answers to the question: What factors - competitive forces shape strategy? Strategy formulation essentially boils down to competition. Competitors are all - customers, suppliers, potential new entrants to the market and producers of substitutes - and depending on the industry, may be more or less important or active. The first primary determinant of a firm's profitability is the attractiveness of the system to which it belongs. Competitive strategy must be developed from the basic knowledge of the rules of competition that determine the attractiveness of an economic system. The ultimate aim of competitive strategy is to apply, or - ideally - a change these rules in favor of the company. In any economic system, regardless of Whether it is domestic or international, and Whether products or services, the rules of competition are embodied in five competitive factors, the five basic forces: the entry of new competitors into the market, the threat of substitution, bargaining power of the buyer, bargaining power of suppliers and rivalry among existing competitors. Joint strength of these forces determines the ultimate potential of an activity to make a profit.
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