Strategic Management Theories Essay Example | Topics and Well Written Essays - 1500 words

Strategic Management Theories - Essay Example Strategic management theorists have over the years developed various tools to help managers in formulating strategies for organisational success. These include the SWOT analysis, Ansoffs matrix, PESTLE, and Porters five forces among others. These tools assess the threats and opportunities as well as the strengths and weaknesses for the firm and enable it to capitalise on them. The Porters five forces and the generic strategies have been widely used by companies to assess the attractiveness of the industry and their competitive position hence are able to formulate strategies to gain competitive advantage in the industry. The five forces include: competitor rivalry, threat of close substitutes, bargaining power of buyers, bargaining power of suppliers, and threat of new entrants. The five forces will be used in this paper to assess the competitive position of the UK fire service and the strategies employed by the company. Rivalry in the industry is more apparent where are there are exi sting businesses and threat of entry and exit is high. Firms compete on price, new products, technology, advertisements and on customer service. According to Porter (1998) rivalry results from slow growth within the industry, high fixed costs, lack of differentiation, diverse competitors, and equally balance companies among others. Intense rivalry has a great impact on price and profitability of the firm especially if there are close substitute products in the industry. The UK fire service is a parastatal which operates under separate legislation and administrative arrangements of devolved governments of England, Wales, Scotland, and Northern Ireland. The Fire and Rescue Service (FRS) is funded and governed by the fire authority. There are various fire brigades in each country under local authorities but in North Ireland, there is only one statutory corporation funded by department of health, social services and public safety (UK Fire Service, 2012). As such, there are no strong com petitors in the fire industry since most services are offered for free by the government. However, there are competitors such as DDA fire ltd which is the largest private fire service in UK offering specialist fire and safety, high profile health and safety consultancy and sales services to private sector (DDA, 2012). Some of the FRS in UK include: fire fire and rescue services in Scotland, Strathclyde with 111 fire stations strategically placed in Scotland, NIFRS in N.Ireland with 68 stations and the London FRS under the fire authority. There is no intense rivalry in the industry hence it is attractive for investment. Another force as portrayed by porter is the bargaining power of suppliers in the industry which has an effect on prices and quality of products. According to Porter (1998) a high bargaining power is achieved when there are few companies or suppliers in the industry. It also occurs when there are no close substitutes such that even if the suppliers offered high prices, the industry would still take it since there is no option. If the product is essential in the industry, the suppliers may also have power over it. The suppliers can also threaten to integrate forward hence becoming a threat to the industry. However, De Wit and Meyer (2010) argue that forming the right strategy can alter the power of