Before starting a new business, Mary wants to analyze which strategy would be appropriate for her business to enter a new market. Which of the following business strategy analysis methods is needed?

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BlackTom AI · Accepted Answer

To determine the appropriate business strategy analysis method for entering a new market, we should consider what each method primarily analyzes.
Option 1: SWOT Analysis. This framework examines strengths, weaknesses, opportunities, and threats, offering a broad snapshot of a firm’s internal and external factors, but it is not specifically focused on industry structure or competitive forces in a new market.
Option 2: Porter's Three Generic Strategies. This model describes broad competitive positions a firm can adopt (cost leadership, differentiation, or focus). While useful for choosing a generic competitive approach, it does not directly analyze the competitive dynamics of the industry entering a new market.
Option 3: Porter's Five Forces Model. This method specifically assesses industry structure by examining the five competitive forces: supplier power, buyer power, competitive rivalry, the threat of new entrants, and the threat of substitutes. This analysis is particularly valuable when evaluating a new market to understand competitiveness and profitability potential, guiding strategic entry decisions.
Option 4: Value Chain Analysis. This focuses on internal activities and how value is created within the firm to gain efficiency or differentiation, rather than assessing external industry dynamics in a new market.
In the context of Mary’s goal—analyzing which strategy would be appropriate for entering a new market—the Five Forces model is the most directly relevant tool for understanding industry-level competition and profitability, guiding entry strategy accordingly.

Before starting a new business, Mary wants to analyze which strategy would be appropriate for her business to enter a new market. Which of the following business strategy analysis methods is needed?

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