Figure 1 - uploaded by Blaine Bateman
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Relationship of Porter's five forces to Profit. (Magretta J. , The Fundamental Equation, 2011c) (used with permission)
Source publication
Many electronics markets seem continuously to increase in competitive intensity. Even in consolidated markets there is often fierce competition and intense investment both for " the rest " of the market and to take share from the leaders. We could be justified in assuming there is some strategic intent behind decisions to enter highly competitive a...
Contexts in source publication
Context 1
... illustrated a formulation for strategic comparison by attaching the five forces to a simple profit equation (Magretta J. , 2011b). Figure 1 is an adaptation of Magretta's figure from her book (Magretta J. , 2011c). This equation means that the forces increase cost or decrease price as shown, and the relative impact of forces in different markets thus impacts profitability of the market. ...
Context 2
... equation means that the forces increase cost or decrease price as shown, and the relative impact of forces in different markets thus impacts profitability of the market. Price and Cost in Figure 1 include all the underlying factors establishing baseline values, such as a theoretical lowest cost based on best available technology, availability of capital, etc. The market factors then determine the actual price and costs observed by a firm. ...
