An investigation of business strategies using porter five forces in food industry for SME in Malacca

Azman, Siti Norhaslina (2019) An investigation of business strategies using porter five forces in food industry for SME in Malacca. Project Report. Universiti Teknikal Malaysia Melaka, Melaka, Malaysia. (Submitted)

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Abstract

Porter's Five Forces is a model that identifies and analyzes Five (5) competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. The five competitive forces include the threat of new entrants, the threat of substitutes, the bargaining power of buyers, bargaining power of suppliers and rivalry among existing competitors. The success and failure of a company depend on the business strategy of a company and the company usually used one of the strategies namely, cost leadership, differentiation strategies, and focus strategies. The Porter Five Forces is a feasible mechanism to improve the business planning strategy. The objectives for this study are first, to identify using Porter Five Forces, the factors influencing a company business strategy. The next objective is to determine the business strategy that is appropriate for the company based on the Porter Five Forces Model, and then to evaluate the effectiveness of the chosen business strategy using the Porter Five Forces. The study is conducted in the Small Medium Enterprise (SME) of the food industry in Melaka. Questionnaires are distributed to the owner or to the top management of Three (3) companies. These are followed by conducting interviews using semi-structured questions. The aim is to get an in-depth information from the respondents. The findings show that Company A implemented differentiation strategies, Company B implemented focus strategies and Company C implemented cost leadership strategies. However, using Porter’s Five Forces, it is seen that Company C has chosen a strategies that suit their strengths and weaknesses. Both Company A and B need to evaluate their strategies to take into account the elements in Porter’s Five Forces.

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