Porter's Five Forces Model & It applies to beer Industry Today | Marketing Strategy

Features

1. Porter's five forces include supplier power, barriers to entry, threat of substitutes, purchasing power and the rivalry that the results of the previous four forces. In the beer industry, the forces to dictate how a company can collect the inputs to create beverages, access to product distribution, consumers switch to other products and the opportunity for consumers to buy products.

Considerations

2. While the five forces model focuses on market issues, non-market issues --- such as government involvement may affect business --- beer. For example, local municipalities can restrict the sale of liquor on Sunday or a city or county dry, resulting in reduced purchasing power.

Meaning

3. Using the five forces model usually results in a process of ongoing management in the business environment. Although the company can dominate the market in terms of sales, consumers can be sensitive to price, if a competitor is cheaper available. The companies will rethink strategies to reflect this change, such as the restructuring of operating costs to use a price advantage.

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