Research Paper: Strategic Management Porter's Five Forces

Pages: 10 (3219 words)  ·  Bibliography Sources: 5  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] Bowne helps clients create, edit and compose their documents, manage the content, translate the documents when necessary, personalize the documents, prepare the documents and in many cases perform the filing, and print and distribute the documents, both through the mail and electronically."

They also make the statement that the industry they are engaged in has many small, independent contractors that share in the overall profitability of the industry. This has made it necessary for Bowne to continue to create products and processes that its customers will use to increase its promise of increased profitability.

First, it is necessary to look at the financial stability of the company relative to what they say. Financially, Bowne slid in their market share in both 2008 and 2009. The reason for this can be seen in the fact that the company is in a very competitive market which requires constant research and development to keep ahead of competitors. Overall revenue decreased by almost $175 million over those two years. While Bowne continued to innovate, they obviously lost some significant business as did many companies during this period. The one measure that has decreased which may speak to the overall strength of the business is that its debt to total capital decreased. Generally, this means that the company is not financing using debt and that they are more financially secure because they are using equity to finance. Since equities have been decreasing in the last two years, this number should have gone up. This speaks to the inherent strength of the company overall, as they have reduced their workforce to a sustainable number, and cut out unnecessary businesses (Bowne, 2009).

The Five Forces Model lists "threat of new entrants, threat of substitute products or services, rivalry among existing competitors, bargaining power of suppliers, and bargaining power of buyers" (Porter, 2008) as the forces that are arrayed against any business. The strategic plan of Bowne & Co. has to successfully determine how they can combat, or work with, all of these forces in order to continue being a profitable company.

The industry that Bowne is engaged in is one in which there are so many competitors that it is difficult to find any profit using staid models. Therefore, there must be new innovation in the products and processes they use. Bowne's competitors range in size from the small, independent shop, to large corporate concerns, such as Bowne, which are diversified into many different aspects of document services. Bowne has used the financial services side of its business as its major supplier of revenue, so they have had to continue to innovate to remain viable. This innovation has been, mainly, in the fast changing world of internet services. Bowne has made their documents more user-friendly and accessible, so its clients can continue to use them with accuracy. Bowne has also bought out smaller businesses that have created innovative products that will invigorate the larger company. In these ways, Bowne has been able to increase the way that their industry conducts business, and thereby grow their profitability.

In any business where there is an increased level of profitability, such as Bowne has created through innovation, there will also be new competitors vying for that extra profit. As new competitors enter the market, existing companies must determine new streams or they will see their profits decrease. Bowne & co. have tried to stay ahead of the many new competitors that are entering the market by expanding what they can do within the confines of their industry. One of the main ways that Bowne has done this is to increase their share of the compliance reporting market. Bowne (2009) says that compliance reporting is not as volatile as the rest of the market because every company needs to make sure that they are paying their taxes, and staying current with the reporting that various government agencies require. About the competitors, Bowne (2009) says;

"The primary competitors provide end-to-end, digital services ranging from message design services, to technical solutions design and implementation, to printing and distribution via mail or online delivery. Bowne is focused on providing the full range of services required to support clients with data integration, document creation, production, distribution and management solutions that address the growing variable personalized communications needs of many industries."

Because Bowne is a one-stop shop for their customers, they are able to maintain their market share against the competition that provides just a portion of what the customer needs. By making sure that they can continue to do this, and through the innovations provided by the internet, Bowne is in a position to increase their profitability.

The next force the Porter mentions is the threat that there will be substitutes coming into the market. The document services industry is always devising new ways to deliver, structure and maintain the documents that they provide. Because of this constant change, Bowne must constantly be looking for new ways to conduct their business. Bowne is continuously trying to stay ahead of any substitute products is to use electronic media to expand their business, and one concrete example of this is Bowne Virtual Dataroom. This is a "a hosted online data room capability, which provides a secure and convenient means for clients to permit due diligence of documents in connection with securities offerings, mergers and acquisitions and other corporate transactions" (Bowne, 2009). By using such innovations as they become available, Bowne is able to outdistance any substitutes that may be created for their existing products or processes.

The customers who buy the products from companies like Bowne can go to any of other competitor if they have better products, prices, or services. Bowne, realizing this, has determined to listen to their customers and make new products available to them. The new products are not designed to publicly tout the innovative capabilities of the company, but to make it easier for customers to use and modify the products. Because Bowne has stayed up with the stated needs of its customers, it has been able to grow its base.

Finally, suppliers have a say in whether a company will maintain its profitability or not. Bowne uses some paper products, but has grown into a company that supplies customers mainly with internet documents. Because of this, Bowne and companies like it have almost eliminated the need for suppliers. The customer must have a reasonable method of obtaining the document via the internet, but Bowne only has to place access on a server. They can use the same server types as anyone else, so they are not regulated by supplies that control access to materials specific to their industry. For this reason, the force does not largely affect Bowne's business.

Strategic Position

The strategic position that Bowne must take is one that will lead to its continuing to innovate and find new ways to streamline its business. Bowne, being a large supplier of document services to the financial services market, is already poised to maintain its lead in this market. But it would be easy for other companies to jump ahead if they can provide better service in a particular area. In some ways Bowne is vulnerable because it is so big. They provide top down servicing to all of their customers, so it may be easy or them to be surpassed in some small part of the process. They need to watch every aspect of the business and ensure continued superiority in the internet marketplace.

So far, Bowne has been able to maintain its innovation and with the new merger with R.R. Donnelley it should be able to continue this. Merging with the larger company makes it possible for them to put more cash into emerging markets that it would have had to use previously for business management purposes. By utilizing the advantage it now has, Bowne can continue to lead its segment of the industry, and even provide as platform for expanding their document services.

Implementation of Strategic Advantage Plan

Bowne already has the strategic advantage over its competition, but it must maintain this to further grow its business. The strategic advantage plan has to include a way to improve its processes even more. The internet and new computer technology are constantly updating. The savvy business will be able to utilize those components to enhance its own productivity. Since the main focus of Bowne's business is now the internet, they need to find ways to make the process of obtaining and modifying documents simpler. Bowne has already used the virtual dataroom concept to make itself more available to customers, but this step toward security of documents and accessibility is just a small step. By working to increase the safety which they offer customers, they can keep ahead of the competition since it is a major concern with internet processes. Strategic advantage is mostly concerned with staying ahead of the competition as the forces tighten the… [END OF PREVIEW]

Four Different Ordering Options:

?
Which Option Should I Choose?

1.  Buy the full, 10-page paper:  $28.88

or

2.  Buy + remove from all search engines
(Google, Yahoo, Bing) for 30 days:  $38.88

or

3.  Access all 175,000+ papers:  $41.97/mo

(Already a member?  Click to download the paper!)

or

4.  Let us write a NEW paper for you!

Ask Us to Write a New Paper
Most popular!

Strategic Management of Huntington Ingalls Industries, Inc Case Study


Michael Porter's Five Forces Framework Term Paper


Strategic Management and Planning Term Paper


Strategic Research Project: Apple Research Paper


Project Management Considered as the "Father Research Paper


View 372 other related papers  >>

Cite This Research Paper:

APA Format

Strategic Management Porter's Five Forces.  (2010, November 27).  Retrieved July 20, 2019, from https://www.essaytown.com/subjects/paper/strategic-management-porter-five-forces/7520643

MLA Format

"Strategic Management Porter's Five Forces."  27 November 2010.  Web.  20 July 2019. <https://www.essaytown.com/subjects/paper/strategic-management-porter-five-forces/7520643>.

Chicago Format

"Strategic Management Porter's Five Forces."  Essaytown.com.  November 27, 2010.  Accessed July 20, 2019.
https://www.essaytown.com/subjects/paper/strategic-management-porter-five-forces/7520643.