1. The threat of new entrants.
2. The bargaining power of suppliers.
3. Threats from substitute products or services.
4. The bargaining power of buyers.
5. Rivalry among existing firms.
He recommends three generic strategies to out-perform competitors or maintain a market position against competition, all of which ZOOTS is able to perform admirably.
ZOOTS does manage to offer the same or better quality dry cleaning services; and although it is not always at less cost than anyone else, the price is usually competitive within the market. Another rule of Porter's is to enjoy greater profits or in the event of a price war, stay in the market, profitably, with reduced prices, which ZOOTS is able to do. Also, ZOOTS intends to offer a better or different product/service (or perceived as different) from others, with differentiated quality as the target. For instance, does ZOOTS ignore costs? Quality imperatives demand a strategy equating the product with desirable quality standards. Differentiation can earn above average profits even in a slow growth or declining market. Thirdly, Porter suggests focusing on a section or group of the buying public or a segment of a product line. Or perhaps ZOOTS would focus on an area of a geographic market. The premise here is that ZOOTS would be able to service a narrow target more effectively than rivals who compete more broadly would. Low cost and differentiation will still be required for the niche.
SWOT Analysis .
Strategic managers and researches within ZOOTS have always been interested in the competition between firms. This effort is normally focused on the relationship between a firm's environmental opportunities and treats on one hand, and the internal strengths and weaknesses on the other. This analysis, known as the SWOT analysis is traditional logic which suggests that firms use the internal strengths in exploiting these opportunities while avoiding internal weaknesses and are more likely to gain competitive advantages than other firms (D.
