Porters Case

In every industry, there is a model that can be used to identify the strategy,

profitability, and power of particular companies. This model is called the five forces

model. This gives an analysis of companies for competing and personal uses. The five

forces model consists of two major parts. The first part of the model consists of rivalry

among existing firms, threat of new entrants, and threat of substitute products. This

part measures how much actual and potential competition there is. The second major

part is between the bargaining power of buyers and the bargaining power of suppliers.

These two measure the power a company has or does not have over the buyers and

suppliers. In using this model, we will be able to identify these valuable parts of

Procter & Gamble. The growth in this industry has been moving up on a yearly average. Every

year, the industry seems to steadily increase its annual sales revenue (see figure 3).

Given this information, price wars are expected to happen. To be able to survive, these

companies have to manage decisions by getting rid of every expense that is not

needed. In 2005, the industry grew 8.14 percent. In 2006, the industry grew 11.87

percent. That is a 3.73 percent change in industry growth from 2005 to 2006. A major

portion of that was from Procter & Gamble’s purchase of Gillette. Because of Procter & Gamble’s purchase of Gillette in 2006 sales grew by 20.23 percent. This is a 9.85