Q1: A) to what extent has web technology changed the 5 forces of the retail industry?

Porter Five Forces Analysis

Porters five forces model can be used to assess the impact of e-commerce on an organizations specific situation (Porter, 1985). We use this model in order to assess the impact of the ecommerce on business. Porters five forces model is a model which assesses the impact of the following factors on an organisations environment: The threat of substitutes The bargaining power of suppliers Rivalry among existing competitors Bargaining power of buyers

Barriers to entry
Threat of substitute products or services According to Porter (2001), the e-commerce brings a positive change on the overall industrial structure which becomes more efficient as the e-commerce expands the size of the market. However the proliferation of e-commerce approaches creates new substitution threats.

Bargaining power of suppliers Porter (2001) argues that procurement using the e-commerce tends to raise bargaining power over suppliers, though it can also give suppliers access to more customers. On the other hand, the e-commerce provides a channel for suppliers to reach end users, reducing the leverage of intervening companies. Since e-commerce procurement and digital markets tend to give all companies equal access to suppliers, differentiation is reduced and there is a tendency to standardize products (Porter, 2001). Another result of the e-commerce is the shifting of power to suppliers due to the proliferation of competitors.

Rivalry among existing competitors Competition among competitors will increase due to reduced differences as offerings are difficult to keep proprietary. Therefore competition will be more on the lines of prices. As the geographic market widens, the number of competitors increase. There comes increasing pressures for price discounting.

Buyers - bargaining power of customers Customers now have low switching costs due to intense competition and therefore have more bargaining power.

Barriers to entry Anything that e-commerce eliminates or makes easier to do reduces barriers to entry. Since ecommerce applications are difficult to keep proprietary from new entrants and the e-commerce has made many things easy the barriers of entry are lowered. Since intermediaries are no longer needed and sales forces are no longer mandatory, barriers of entry are reduced further (Porter, 2001).

B) Critically evaluate the 5 forces model as a tool of competitive analysis?

Porter concludes that the overall impact of the Internet is to increase competition, which negatively impacts protability. According to Porter, The great paradox of the Internet is that its very benets making information widely available; reducing the difficulty of purchasing, marketing, and distribution; allowing buyers and sellers to nd and transact business with one another more easily also make it more difficult for companies to capture those benets as prots (2001, p. 66). In many other ways Web-based systems are changing the nature of competition and even industry structure. Consider the following:

Bookseller Barnes & Noble, hardware sales giant The Home Depot, and other companies have created independent online divisions, which are competing against the parent companies. Such companies are termed click-and-mortar companies, because they combine both brick-and-mortar and e-commerce operations. Any company that sells direct to consumers is becoming a distributor (whole-seller or retailer), competing against its own traditional distributors.

The variable cost of a digital product is close to zero. Therefore, if large quantities are sold, the products price can be so low that it might be given away, for free. For example, some predict that commissions for online stock trading will go to zero for this reason. Competitors are getting together and becoming more willing to share information. Examples are the vertical exchanges owned by industry leaders. The Big Three auto manufacturers, for example, operate the auto exchange. Similar exchanges exist in the paper, chemical, and many other industries.

Q2) some successful businesses do not believe in strategic planning. Give an example of such business and identify reasons for their superior performance
Strategic planning is the process followed by an organization in which it defines its strategies and makes plans for proper allocation of its available resources to achieve its objectives. While developing a strategic plan, it is essential to consider the various internal organizational factors in order to help the plan succeed. The internal organizational factor comprises of mission, vision, values and guiding principles, strategy and strategic objectives of the organization. Before creating any strategic plan, it is essential to know where we are standing and where we intend to go. We must have a look at the mission as well as the vision statement of the organization, match it with the required demands and then frame the strategic plan. The mission statement depicts the purpose that an organization has and vision statement determines the future by formulating a picture of the organization. Therefore, they are the most important internal considerations for the development of a strategic plan.

Strategic planning is an involved, intricate, and complex process that takes an organization into non chartered territory. It does not provide a ready-to-use prescription for success; instead, it takes the organization through a journey and offers a framework for addressing questions and solving problems. Being aware of potential pitfalls and prepared to address them is essential to success. Some pitfalls to watch for and avoid in strategic planning are provided below: Using strategic planning to gain control over decisions and resources Doing strategic planning only to satisfy accreditation or regulatory requirements Too hastily moving from mission development to strategy formulation

Failing to communicate the plan to employees, who continue working in the dark Top managers making many intuitive decisions that conflict with the formal plan Top managers not actively supporting the strategic-planning process Failing to use plans as a standard for measuring performance Delegating planning to a "planner" rather than involving all managers Failing to involve key employees in all phases of planning Failing to create a collaborative climate supportive of change Viewing planning to be unnecessary or unimportant Becoming so engrossed in current problems that insufficient or no planning is done Being so formal in planning that flexibility and creativity are stifled.

Strategies
Strategists are individuals who are most responsible for the success or failure of an organization. Strategists are individuals who form strategies. Strategists have various job titles, such as chief executive officer, president, and owner, chair of the board, executive director, chancellor, dean, or entrepreneur.

Strategists help an organization gather, analyze, and organize information. They track industry and competitive trends, develop forecasting models and scenario analyses, evaluate corporate and divisional performance, spot emerging market opportunities, identify business threats, and develop creative action plans. Strategic planners usually serve in a support or staff role. Usually found in higher levels of management, they typically have considerable authority for decision making in the firm. The CEO is the most visible and critical strategic manager. Any manager who has responsibility for a unit or division, responsibility for profit and loss outcomes, or direct authority over a major piece of the business is a strategic manager (strategist).

Strategists differ as much as organizations themselves and these differences must be considered in the formulation, implementation, and evaluation of strategies. Some strategists will not consider some types of strategies because of their personal philosophies. Strategists differ in their attitudes, values, ethics, willingness to take risks, concern for social responsibility, concern for profitability, concern for short-run versus long-run aims and management style.

Vision Statements
Many organizations today develop a "vision statement" which answers the question, what do we want to become? Developing a vision statement is often considered the first step in strategic planning, preceding even development of a mission statement. Many vision statements are a single sentence. For example the vision statement of Stokes Eye Clinic in Florence, South Carolina, is "Our vision is to take care of your vision." The vision of the Institute of Management Accountants is "Global leadership in education, certification, and practice of management accounting and financial management."

Mission Statements
Mission statements are "enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm's operations in product and market terms. It addresses the basic question that faces all strategists: What is our business? A clear mission statement describes the values and priorities of an organization. Developing a mission statement compels strategists to think about the nature and scope of present operations and to assess the potential attractiveness of future markets and activities. A mission statement broadly charts the future direction of an organization. An example mission statement is provided below for Microsoft.

Microsoft's mission is to create software for the personal computer that empowers and enriches people in the workplace, at school and at home. Microsoft's early vision of a computer on every desk and in every home is coupled today with a strong commitment to Internet-related technologies that expand the power and reach of the PC and its users. As the world's leading software provider, Microsoft strives to produce innovative products that meet our customers' evolving needs.

Examples
The example of an organization that has achieved competitive success through planning is WalMart. It is well known that Wal-Mart has a large number of stores around the world and its products occupy a place of great significance. Its branches and stores could be easily found in each and every part of the world. This is the result of an efficient planning system followed by

Wal-Mart that has brought it so far successfully. Its objectives comprises of satisfying the customers with the world's finest products.

The example of an organization that has failed to achieve competitive success through failed planning is McDonald's. In its initial stage, when it started its operations in India, it faced a major setback. This was mainly due to the failed planning strategies of the organization. It could not frame proper objectives regarding its launch in a new country (Writing a Business PlanSuccess Factors).