International Business Management Essay Example | Topics and Well Written Essays - 3000 words - 2

International Business Management - Essay Example It would use it to provide insight into how the concept can be used and a critical example of how the theory can be invoked. In his book, Competitive Strategy, Porter identifies some important elements that are necessary for the attainment of competitive advantage. Porter stated that competitive advantage arises when a firm provides the highest level of value to consumers, and hence attract the highest prices from them. Porter argues that this can only be internalised if a firm identifies some external elements in the business environment and internalize them in order to form a strategy based on them. In order to attain competitive advantage, a business needs to examine the unique positions and capabilities of competitors and players in an industry. When this is done, a firm can identify a business strategy and after that, designs its functional systems. Industry analysis involves the examination of the key players and the key threats to a given firms quest to attain competitive advantage. This is done by examining five main forces of the industry. These elements are: Every industry exists to produce some kind of value to the wider society. The industry would always exist and there is some kind of balance and stability that comes up naturally as the industry thrives and grows. The risk of entry of potential competitors refers to the situation whereby some third party businesses can enter the industry and produce services that can change the dynamics. The risk of potential competitors entering a given industry is strongly related to the presence or absence of barriers in a given industry. If there are no barriers in the industry and new entrants can easily enter, and this would make the sector extremely problematic. This is because a firms competitive advantage can be easily threatened. However, if there are high barriers like high capital requirement and other regulations, then an